Buy Now, Pay Later Coming to Food and Beverage Categories Despite Pushback

On Thursday (Jan. 20), news broke that consumer finance company Zilch was coming under fire for promoting its buy now, pay later (BNPL) option as a way to pay for pizza at the supermarket in a now-deleted blogpost, but for better or quite likely for worse, Zilch is not the only company attempting to extend BNPL to the food and beverage space.

Related news: London-Based Zilch Blasted for Promoting BNPL to Buy Pizza

Zip, for one, the Sydney, Australia-based financial technology company that in 2020 acquired the United States’ Quadpay BNPL provider, has a whole food and beverage category on both its American and Australian sites, featuring everything from groceries to meal kits to restaurants to delivery aggregators.

Similarly, Melbourne, Australia-based BNPL solution Afterpay, which is in the process of being acquired by Jack Dorsey-helmed financial services company Square, has a “Dining & Restaurants” hub on its Australian site, though only packaged foods and beverages appear on the company’s U.S. web store. Additionally, some providers have cards that offer BNPL options for on-site shopping, which consumers can also use at restaurants.

Certainly, BNPL providers would like to extend the service to more purchasing occasions beyond retail.

“Anything that gets back to aligning expenditure with cash flow I think is good for consumers,” PayPal Vice President of Global Pay Later Products Greg Lisiewski said in a PYMNTS TV interview in October. “And you’ll start to see these solutions penetrate other non-retail verticals but big spend categories.”

See more: BNPL Is ‘Humongously Important’ Tool for Non-Retail Merchants

Many restaurants are already onboard with a vision of the future that involves the option to split meal payments into installments. Research from this month’s study, “Main Street Merchant Index: Optimism Amid Inflation Edition,” a PYMNTS and Melio collaboration, which surveyed 765 business owners on Main Street U.S.A. about their present situation and future plans, found that while only 8% of food, entertainment and accommodation businesses currently offer BNPL, a full 25% plan to implement BNPL in the next year.

Get the report: Optimism Amid Inflation Edition

Additionally, research from last month’s report The New Credit Model: Why Financially Worry-Free Consumers Still Want Alternatives To Traditional Credit, a PYMNTS and Sezzle collaboration, which draws from a survey of more than 7,000 U.S. adults, found that 65% of consumers who use or would use BNPL options say they are more likely to shop at stores that offer BNPL, and 21% of consumers are interested in using it to pay for groceries.

Read the full report: The New Credit Model: Why Financially Worry-Free Consumers Still Want Alter­natives To Traditional Credit

“There are fundamental shifts happening in how consumers shop, pay and bank,” Matthew Suraci, head of business development and partnerships at Klarna, told PYMNTS in an interview featured in the January edition of the Alternative Payments Tracker®, created in collaboration with Socure. “Using a buy now, pay later option offers shoppers a lot of advantages that they’ve come to expect — the most obvious is the ability to purchase items now and split the cost into interest-free installments, which offers greater cash flow control.”

Get the Tracker: Alternative Payments Tracker®