PayPal's BNPL Cash Back Revolution | Fast Five Shorts
This segment from the Omni Talk Retail Fast Five podcast, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso, explores PayPal's groundbreaking move to offer 5% cash back on Buy Now Pay Later purchases.
Anne shares surprising data from Groceryshop revealing that consumers are using BNPL for everyday essentials like fresh groceries, not just big-ticket items. Chris reflects on his 2017 prediction that BNPL would become ubiquitous... and why this cash back offer is one of the most compelling deals in retail today. Is this the future of consumer payments?
For the full episode head here!
#paypal #buynowpaylater #bnpl #cashback #retailpayments #consumerfinance #holidayshopping #paymentinnovation #retailtech #shoppingtrends
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Transcript
PayPal is tying buy Now Pay later to Cash back, according to payments dive.
Speaker A:PayPal holdings said Monday it's giving consumers a 5% cash credit on Buy Now Pay later purchases online and in physical stores through year end as the company looks to expand its quote Omnichannel strategy.
Speaker A:I love that we have to still quote omnichannel and and expand installment lending to more bricks and mortar mortar merchants.
Speaker A:PayPal have used its first BNPL cashback promotion as a way to entice more shoppers to try the loans and to reduce card abandonment for retailers during the holiday shopping period.
Speaker A:Michelle Gill, PayPal's general manager of small business and financial services, said earlier this week.
Speaker A:And you are all aflutter coming out of Grocery Shop about bnpl.
Speaker A:Why was that first of all?
Speaker A:And second of all, why do you think PayPal's cash back?
Speaker A:What do you think?
Speaker A:I'm sorry, what do you think PayPal's cash back incentives say about shopping for the holidays?
Speaker B:Yeah, I think one of my we said this in the Takeaways podcast, but for those who weren't there to catch that, one of the most surprising stats or data points from Grocery Shop for me was when I was sitting at a dinner with a mass retailer and this individual told me that, you know, they created a BNPL program for their customers that they thought was going to be for the things that that PayPal is talking about here for the holiday shopp, for the investment in a patio set, you know, come the summertime.
Speaker B:But what they were seeing the most sales from this BNPL platform were in areas like fresh products, essentials, things that people need to spend money on day to day, not these big purchases.
Speaker B:So I think that was a very telling stat for me about the future of BNPL and, and about the current state of the consumer.
Speaker B:And I think on one hand what PayPal is doing is great because it's allowing individuals who can't get access to a credit card, they don't have the credit, they are living month to month and they need some way to make their, their paycheck stretch.
Speaker B:It is allowing them to be able to afford to feed families.
Speaker B:And I think that the cashback thing is an interesting incentive here because typically that's something we see from a credit card.
Speaker B:That's something that we see, you know, that's a reason to get a Chase Card over an American Express.
Speaker B:So I think this is going to make PayPal's buy now pay later very sticky because consumers are going to get some of those same benefits that they would get toward a credit card, but now with Buy Now Pay later and makes them much more loyal to using PayPal's version of buy Now Pay later over anything else because they get that money back in their pocket and that's where, that's the situation that they're in right now.
Speaker B:But Chris, you've long been talking about this as a Buy now, pay later opportunity.
Speaker B:What do you think of this?
Speaker A:Yeah, I mean, I'm not, I'm not surprised that we're, you know, at this point at all.
Speaker A:I mean, Adobe just out their numbers for buying BNPL in total for the industry yesterday in terms of what they're expecting online.
Speaker A:And it's, you know, at record, record paces too.
Speaker A:So, you know, this is actually probably one of the best shots I ever called.
Speaker A: irst heard about BNPL back in: Speaker A:So, yeah, the five.
Speaker A:The other point I'd make too, this is, this is a really compelling deal.
Speaker A:5% cash back.
Speaker A:That's incredibly compelling.
Speaker A:That's an incredible rate of return on your holiday shopping and you get the ability to defer your payments too.
Speaker A:So, yeah, so, I mean, it just shows you that it's here, it's coming.
Speaker A:You know, we called it eight years ago and yeah, not surprised one bit.
