Buy Now, Pay Later Could Appeal To Gen Z, Millenials

According to GlobalData, Millennials and Gen Z will be the two cohorts driving demand for buy now, pay later schemes as they were hit particularly hard by the pandemic.

The data and analytics company points out that airlines partnering with fintech companies to offer these schemes could attract price-sensitive millennial and Gen Z travelers looking for flexible, low-cost payment methods.

In its Q4 2021 Consumer Survey, GlobalData reports that 34% of Gen Z and 36% of millennials stated that they were ‘extremely concerned’ regarding their personal finances, which were the two highest percentages out of all the age cohorts that responded to this question.

GlobalData cited the buy now, pay later service, Uplift which has been deepening its partnerships with a number of Canadian suppliers, along with Southwest Airlines in the U.S.

Ralph Hollister, travel and tourism analyst at GlobalData, said that: “Uplift’s use of the terms ‘interest-free’ and ‘no late fees’ will no doubt attract price-sensitive millennial and Gen Z travellers that are looking for flexible, low-cost payment methods. Most importantly for airlines and their recovery timelines, buy now, pay later enhances accessibility as smaller payments can be made over several months, which translates to higher load factors. The accessibility that this payment solution offers means it is not only low-cost carriers (LCCs) taking advantage of this scheme with Delta and American Express announcing their joint venture last month.”

He also pointed to Delta’s flexible payment option that allows for Amex customers to break up their Delta purchases into monthly payments for an additional fee.

Said Hollister: “Airlines such as Delta can’t afford to only be seen as a premium service, as it will struggle to attract Gen Z and millennial passengers. Through this payment option, Delta can get its foot in the door with these younger cohorts, then try to create repeat custom through its loyalty program.”

And he added: “Buy now pay later could play a key part in the recovery of airlines that have adopted this payment method. Flexibility and affordability are key influencing factors for younger travelers, and this solution could even inspire a lifetime of loyalty.”

Go to www.globaldata.com for more.