There has been a clear shift towards fintech solutions when consumers are shopping. A new whitepaper, produced by buy now pay later service, Afterpay and paytech Cash App, explores how this shift is actually spreading better financial habits, rather than putting people into difficult situations.
The Afterpay and Cash App report, titled The Future of Money, reveals that many customers are turning to fintech services as traditional banks are failing to meet their needs. Roughly 25 per cent of consumers haven’t used a traditional checking or savings account in the past year. Instead, they have resorted to using fintechs which provide greater convenience, speed and transparency.
The survey also highlights that credit card debt is a top financial burden for many consumers. Consumers struggle with it more than mortgages, medical debt, and auto loans. Troubles with debt and credit card balances weigh heavily on monthly expenses. They can create a cycle that’s both financially draining and discouraging for many consumers.
With 24 per cent of respondents viewing the current credit system as unfair and 21 per cent even labelling it invasive, the appetite for alternative, consumer-friendly solutions has never been stronger.
Younger generations trust fintech
Fintech solutions resonate with financially savvy Gen Z and Millennial consumers who are turning to flexible, transparent options that align with their values. As revealed in the survey, approximately one in 10 Americans now use a BNPL service, and Afterpay remains a preferred choice thanks to its commitment to transparency and responsible lending.
Alternative payments
Unlike credit cards, which often lock users into revolving debt with interest charges, alternative payment methods like BNPL allow consumers can make purchases in installments.
Looking specifically at Afterpay, it has had a 30 per cent year-over-year increase in use since last year. This rises to 36 per cent among individuals who are underbanked.
Solidifying its place in the market, Afterpay is being integrated with Google Pay so that users can use the paytech to checkout using Google Pay at select merchants.
“People shop on Google more than a billion times per day, and consumers are increasingly looking for more choice and flexibility when it comes to payment options,” said Drew Olson, senior Director, Google Pay. “By teaming up with pay over time providers like Afterpay, we are able to give Google Pay users more payment options when checking out, while providing merchants with another tool to drive growth.”
“Afterpay’s integration with Google Pay comes at the perfect time as next-gen shoppers are fueling mainstream use of BNPL, mobile commerce, and digital wallet use. We are excited to expand our BNPL to Google’s network, creating the best and most streamlined customer shopping experience that meets all the needs of this younger consumer set,” said Tanuj Parikh, head of global partnerships, Afterpay and Cash App.
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