PayPal CEO says spending via its buy-now-pay-later service soared 400% on Black Friday, as inflation bites and shoppers feel the pinch

• PayPal saw the use of its buy-now-pay-later (BNPL) service soar on Black Friday, CNBC reported.
• The same was true for other BNPL platforms too.
• With inflation at record highs, these services allow customers to spread the cost of pricier goods.

PayPal saw the use of its buy-now-pay-later payment service soar on Black Friday. 

In an interview with CNBC’s Jim Cramer, PayPal CEO Dan Schulman said that the volume of sales on its Pay in 4 service jumped by 400% this Black Friday, compared with the previous year. 

“We did some 750,000 transactions alone in one day on Black Friday,” he told the outlet, describing its payment instalment service as “one of the stars” of the holiday season.

Pay in 4 was introduced in the US in 2020 and allows users to spread purchases across four payments interest-free. 

This level of growth on BNPL was the same across the board. According to data from Adobe Analytics spending across BNPL services was up 422% in November, while the volume of orders was up 438% on these platforms from 2019 levels.

Klarna, one of the leading players in the sector, said users spent 298% more on its buy-now-pay-later services this Black Friday compared with last year. 

With inflation at 30-year highs, consumers may well be opting for BNPL options to spread the cost of pricier goods. Critics say this comes with financial risk, however. As customers only pay for products after they have received them, it can be tempting to spend more than they have and rack up debt.

This leaves shoppers with a financial headache after the holidays, Neil Saunders, managing director of GlobalData Retail, previously told Insider. 

And as BNPL is typically easier to access than a new credit card because there aren’t hard credit checks, customers who are less financially stable are likely to be more vulnerable.