BNPL Competition Is Fierce. For Now, Satisfaction Is Highest for Credit Card Issuers: A Q&A with J.D. Power’s Miles Tullo
Plus, SEC approval of a spot Ethereum ETF will happen, but not anytime soon.
Number of the Week: $24 million (explanation below)
BNPL Competition Is Fierce. For Now, Satisfaction Is Highest for Credit Card Issuers: A Q&A with J.D. Power’s Miles Tullo
One in five U.S. shoppers has used Buy Now, Pay Later (BNPL) services. Consumers ages 35 and under now comprise 53% of BNPL users, but they’re using the option to pay for less costly, daily essentials in their lives rather than for big-ticket items. And Klarna’s CEO keeps talking about going public. The global BNPL market is expected to hit an estimated $1.21 trillion by 2030 with a compound annual growth rate of 21.5% from 2024 to 2030. One thing is clear: The fight for BNPL customers is already fierce, and overall customer satisfaction strongly indicates the likelihood of brand loyalty and usage. For now, satisfaction is highest among traditional credit card issuers—with more likely to wade into the BNPL pool, putting pressure on companies like Klarna, Afterpay and Affirm to play catch up.
Recently, J.D. Power released its 2024 U.S. Buy Now Pay Later Satisfaction Study, which found that BNPL providers Klarna, Afterpay and Affirm lagged American Express Plan It, My Chase Plan and Citi Flex Pay in overall U.S. customer satisfaction, which was measured across six dimensions: customer support, making purchases where desired, perks for making purchases, reasonableness of terms, digital review and account management, and security of account information. On a 1,000-point scale, Plan It ranks highest in BNPL satisfaction with a score of 695, followed by My Chase Plan (686) and Citi Flex Pay (676), as compared to Klarna (633), Afterpay (626) and Affirm (618). Overall customer satisfaction with BNPL services jumped 16 points year over year, with the biggest increases driven by digital account management, account information security, and reasonableness of terms.
FIN Editor in Chief Holly Sraeel recently interviewed J.D. Power’s Miles Tullo, managing director of financial services, on what’s ahead in the battle for BNPL borrowers, the swings in customer satisfaction across dimensions and the impact on BNPL usage, and how regulatory guardrails could create a healthier market for consumers.
