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Paying with BNPL leads to 72% higher transaction values


A study from Erasmus University Rotterdam (EUR) found that consumers spend on average 72% more per transaction if they pay with BNPL installments. 

Data for the study, Buy now, pay later in the 21st century, was compiled by Magellaan van Rensbergen, a masters student at EUR, in collaboration with Dutch BNPL provider in3. Hundreds of thousands of orders were investigated to compare the payment method offered by in3 to other payment methods such as iDEAL, credit cards, debit cards, and Paypal. 

It concluded that consumers who paid with in3 had a significantly higher average order value (€657.20 compared with €381.20), but did not purchase more items per order. This could indicate that consumers use BNPL to purchase higher-value items rather than more items.

BNPL use is growing rapidly in the Netherlands, where the market is expected to increase from $7.9bn in 2021 to $43.6 billion in 2028.

‘Adding a BNPL option can lead to higher average transaction values and to new customers,’ says Kenan Aslan, CEO of Netherlands-based online home and living products retailer Furnea. ‘Furnea is a case in point,’ he says. ‘Since we added in3 to our payment options, it has become the most used post-payment method. Around 20% of all transactions go through in 3. I think more than half our orders would not be placed if it were not possible to pay with in3. It is also clear that these orders have higher average values. We have found that in3 is mainly used for purchases over €300. Customers are more likely to buy products with a higher price when they realise they can pay in instalments.’

The study selected several e-commerce companies based on the number of transactions they process, the product segment they operate in, and the variety of their products. The e-commerce companies involved provided payment data across furniture and consumer electronics (tablets, phones, chargers, televisions) and are focused mainly on the Netherlands market.

The study suggests that BNPL use increases when consumers can easily identify a premium product and its benefits. This explains why online stores offer price-comparison options. This can site visitors understand, for example, that a cheaper washing machine will often have a higher energy consumption than a more expensive one. When the added value of buying a more expensive item is clear, a BNPL solution makes economic sense for consumers.