The Tylt

Upfront payers—Gen Z and Millennial’s fiscal savviness keeps them from fully buying into BNPL.

Young people have a reputation for spending their money willy-nilly. This is most apparent in the stereotype of Millennials (and, to an extent, Gen Z), who supposedly throw away exorbitant amounts of cash on experiences like Coachella yet fail to finance something like a mortgage. As such, “buy now, pay later” (or BNPL) services—those which allow for payments to be made in installments—should have younger consumers going gaga with frivolous shopping. 

Au contraire. 

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Gen Z and Millennials are far more financially prudent than the public perceives them to be. This makes sense considering the environment both generations have grown up in—the college boom that left them with an ever-growing $1.6 trillion worth of student debt; the gig economy with an empty promise of various cash flows but a reality of insubstantial incomes; and the job market with few positions that make for livable wages or long-lasting careers. They’ve also grown up, many of them now married and expanding upon their family tree. Each of these factors has left younger demographics with a tighter fistful of dollars than their whimsical Coachella stereotype would imply. 

The current trend for companies to implement “pay-as-you-go” methods on products speaks more to the stereotype than the actual individual. Not unlike a subscription, staple brands like Urban Outfitters and Clinique now offer consumers BNPL services such as Afterpay, which gives them the ability to pay for items incrementally as opposed to all at once. According to eMarketer, this is an effort to cater to younger consumer’s tendency to use digital payment plans for products whose prices skew low as well, not just for the expensive ones.

Yet when asked if they’d prefer to pay for something over time or all upfront, 76 percent of Tylt voters chose the latter. Although incremental payments would seem to be a viable financial move on the surface, Gen Z and Millennials still wish to opt to #AlwaysPayAtOnce for products. This sentiment is reflected by the results of a similar debate—“Would pay-as-you-go convince you to buy more expensive clothing?”—in which 72.7 percent of Tylt audiences voted in the negative.  

It’s a display of a financial savviness Gen Z and Millennials have acquired after learning early on that “flexible” financial plans are anything but, and that the easy way out tends to get one in the most trouble. They’ve become skeptical toward financial games, including, as The Motley Fool points out, the idea of opting into services whose fine print includes potential late fees and other such drawbacks that could get them deeper into the red. 

Instead, they’ve decided to be more practical, even if that practicality includes more old-fashioned attitudes toward money. Over 62.2 percent do believe that payment plans are useful in terms of financial planning; said plans just don’t include any BNPL options. Business Insider reports that Gen Z is already saving up to buy their own homes, with 47 percent looking to build their wealth over time. 

Although useful on some levels, brands should be wary of relying too much on BNPL options for their consumers. They should instead acknowledge Gen Z’s and Millennial’s financial woes, and attempt to cater to them. This will help to foster trust and loyalty—the biggest type of payoff which gains interest for years on end. 

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