U.S. buy now, pay later usage surges nearly 400% during Black Friday

It is reported that thanks to several hot Silicon Valley startups and major credit card companies, you can now buy a $1,500 Peloton exercise bike or a $60 flower bouquet using "buy now, pay later" policy.

About six in 10 U.S. customers have started a buy now, pay later plan this year, one major credit card company said, and Silicon Valley -backed companies offering the plans are adding tens of thousands of new customers each week.

According to PayPal CEO Dan Schulman , on the day of the Black Friday sale, its " buy now, pay later " transaction volume increased by nearly 400% year-on -year , completing approximately 750,000 transactions in one day .

Schulman said the Black Friday activity continued a trend PayPal had observed throughout November, marking the first time the company had more than $1 billion in transaction volume through its buy now, pay later option in a single month , with more than 10 million consumers now using its buy now, pay later service.

PayPal launched an installment payment program called "Pay in 4" in the United States at the end of 2020, allowing people to pay for certain purchases in four interest-free payments. In September, PayPal also announced plans to acquire Japanese company Paidy for $2.7 billion.

"Buy now, pay later" has become increasingly popular among consumers during the coronavirus pandemic, and major financial technology companies are scrambling to grab a piece of this booming market. Leading companies in the field include Affirm , which inked a major partnership with Amazon in August , and Swedish startup Klarna .

PayPal is not the only one that sees a huge market for "buy now, pay later" during this peak shopping season . According to Salesforce data, the use of " buy now, pay later " payment methods increased 29% year-on-year worldwide during the promotion period from November 23 to Monday . Especially on Black Friday, Salesforce said that 7% of orders worldwide and 4% of orders in the United States used short-term installment payment methods.

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