Square saw a 47% increase in transactions via its BNPL arm Afterpay over the five days between Nov. 23 and Nov. 27, 2023, compared to the same period a year ago, Block said this week. Afterpay's global sales rose 19% during the same period, led by sales of fashion and beauty items, hardware, home and garden supplies and arts items, with office supplies and electronics trailing. Square and Afterpay sellers tallied a total of 70 million transactions over the period, up 14% from last year, the company said.
The results, coming two years after Block purchased Afterpay for $29 million following a
"It wasn't clear at first whether [Block] was trying to bring new merchants that knew Afterpay to Square's platform, or bring Afterpay's existing consumer base to Square sellers, but from a value proposition, they seem to have made it work," said Nathan Hilt, head of payments and fintech at the consulting firm Protiviti.
Afterpay, like other major BNPL fintechs including
Many BNPL users opt for interest-free versions of the loans that are repayable in four equal segments over several weeks, like those offered by
Fitting Afterpay — a standalone instant BNPL financing option offered through stores and online merchants — into Square's ecosystem of smaller sellers wasn't easy. It required restructuring Afterpay, Block
"We spent the past few months looking deeply at the Afterpay integration, restructuring that team," Dorsey said in early November. He noted that beginning with the current quarter, the firm moved Afterpay's platform fully within Block's consumer-facing Cash App to encourage small businesses to promote Afterpay for mobile, online and in-store sales. Previously Afterpay's financial results were split evenly between Square and Cash App.
Amazon is also working to connect more small-business merchants with BNPL providers. The e-commerce giant announced a
Citigroup also stepped up its outreach to small businesses with the rollout of its BNPL financing products
BNPL loans are driving sales growth through many other channels so far this holiday season, with about one in four consumers planning to make purchases via BNPL loans, according to payments processor i2c.
On the critical online selling day of Nov. 27 — dubbed Cyber Monday by merchants — BNPL loans from all providers hit an all-time high, reaching $940 million in online spending, up 42.5% from the same day a year earlier, according to Adobe Analytics. BNPL loans accounted for about 8% of all online sales on Cyber Monday, which totaled $12.4 billion, up 9.6% over last year, according to Adobe Analytics data.
Zip reported a 26% increase in sales on Nov. 24 over last year's Black Friday, with 82% of sales occurring online or through Zip's app, versus 18% in stores, the company said this week. The average purchase through Zip was $151 this year, up 4% over last year.
"I think it's become obvious that even though BNPL loans sprang on the scene during the pandemic, their popularity continues to grow and point-of-sale lending is here to stay," Hilt said.