Holiday shoppers flocking to ‘buy now, pay later’ sites

Holiday News

FORT WAYNE, Ind. (WANE) – The way Americans finance the holidays is changing. More and more shoppers are flocking to buy now, pay over time options like Affirm and Afterpay.

While those companies aren’t household names yet, Financial Advisor Greg Reynolds says the trend is growing, with no signs of slowing down. The lure of walking away with a big ticket item and paying for it over time, potentially without credit card interest for qualified buyers, is proving to be very popular. Reynolds calls it a modern day version of layaway, with the twist being that “you get the item NOW. You get the service NOW. You get to take it with you when you leave the store and you pay for it over time.” Reynolds calls the growth of companies like Affirm and Afterpay explosive, “we’re talking about triple digit growth.”

Affirm has been around since 2012, but Reynolds says it’s popularity soared when Peleton sales took off. “Peleton was first to figure out how to spread those payments out by partnering with Affirm. So they made it expensive, but yet affordable at the exact same time.” That success help spur deals with more brick and mortar stores, and now online giant, Amazon. “That’s just expanding the category even further,” Reynolds says. “Now they’re in with Walmart, Target, and Best Buy.”

Pat Hoffmann interviews Financial Advisor Greg Reynolds at Reynolds Wealth Management.

Reynolds says the concept is transforming entire industries. “The growth of huge segments, and huge businesses has really started, and been born off the backs of these afterpay websites.” He expects Christmas shopping to look a little different this year with short inventory because of supply chain issues and consumers with a bit more discretionary income because of stimulus payments and a few other factors that have given shoppers a little more purchasing power. It should create a competitive environment this Christmas. “I think companies like Affirm and Afterpay actually increase that competitiveness because they bring more consumers into the mix for higher dollar items that they otherwise would have passed on.”

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