FICO is implementing a new credit scoring model that will factor in “Buy Now, Pay Later” (BNPL) loans, which previously weren’t considered in credit scores. This change, available to lenders this fall, aims to give a clearer picture of consumer repayment behavior, though widespread adoption may take time. The integration of BNPL loans could help consumers who pay on time improve their credit scores, while also providing a more accurate assessment of a consumer’s financial obligations. However, concerns exist that integrating BNPL into credit scores could negatively affect those already facing credit challenges, despite the possibility of an increase in credit score for some users.
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DoorDash is partnering with Klarna to offer Buy Now, Pay Later (BNPL) options for food delivery, marking an expansion of BNPL services beyond typical large purchases. This allows users to split payments into four interest-free installments or align payments with their pay schedules. While BNPL services have surged in popularity, concerns remain regarding rising consumer debt and lack of regulation. The DoorDash-Klarna partnership coincides with Klarna’s upcoming IPO and reflects the projected growth of the BNPL market to over $160 billion in the next seven years.
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Black Friday 2024 shattered previous ecommerce sales records, reaching $10.8 billion in US online sales—a 10.2% year-over-year increase. This surge, driven by mobile shopping (55% of online sales) and increased Buy Now, Pay Later usage (8.8% year-over-year growth), surpassed even Thanksgiving’s online sales. Significant growth was observed in categories like toys (622% increase over October daily average), highlighting consumers’ responsiveness to deep discounts averaging 28% off. Globally, Black Friday online sales reached $74.4 billion, with AI playing a significant role in driving conversions.
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John Q. Hosedrinker