U.S. consumer spending has plummeted since the COVID-19 pandemic led to worldwide closure of nearly everything. However, our recent Buy Now Pay Later Tracker found that the outbreak could be just the ticket to boost BNPL as a way to bring shoppers back from the brink of financial distress.
BNPL involves buying something on an installment plan of a few payments, often with few, if any, fees or interest charges for the consumer. The concept is to not only make transactions affordable, but seamless.
These arrangements can also allow customers to purchase more or costlier items than they could otherwise, thereby helping merchants. Shoppers can feel more at ease, too, replacing a broken refrigerator or washing machine that conked out right after a consumer lost a job.
BNPL offerings can also ease the costs of smaller ticket items or even help shoppers afford groceries. Perhaps that’s why BNPL providers have seen big increases in business during the coronavirus pandemic.
For example, Afterpay, which operates in the United States, United Kingdom, Australia and New Zealand, recently reported that it served 4.4 million U.S. customers in the company’s fiscal third-quarter ended March 31. That’s up 283 percent from year-ago levels. The company also saw U.S. sales hit $1 billion for the quarter, a 263 percent gain year over year.
Our BNPL report found that while the pandemic might have created more interest in the system, its use was already on the rise in both the United States and Australia even before COVID-19. After all, many younger consumers are wary of traditional credit cards and other loans given that they often earn lower incomes and have less savings than their Generation X or baby boomer counterparts.
They’re also among the most heavily affected by high student-loan and credit-card debt. For example, a recent survey shows that one in three millennials have added to their credit-card debt since the pandemic’s onset.
Afterpay recently noted that 65 percent of its U.S. users are millennials or from Generation Z. This suggests BNPL products have the potential for a strong future.
To read our complete report on BNPL, click here.
Gary Gensler will step down as chair of the U.S. Securities and Exchange Commission (SEC) Jan. 20 with the inauguration of President-elect Donald Trump.
But that didn’t stop Gensler from expressing concerns that more needs to be done to regulate the cryptocurrency market, particularly altcoins and intermediaries.
In an interview with Bloomberg Television on Wednesday (Jan. 8), he emphasized that everyday investors still lack adequate disclosures from digital asset firms and said the cryptocurrency landscape is “rife with bad actors,” highlighting the need for regulatory oversight to protect investors from fraud and misinformation.
Gensler’s tenure has been characterized by aggressive enforcement actions against numerous cryptocurrency entities, including high-profile cases involving Coinbase Global and Ripple Labs. Since taking office in 2021, he has overseen about 100 enforcement actions related to cryptocurrencies.
While Gensler’s SEC chair predecessor, Jay Clayton, focused his 80 enforcement actions between 2017 and 2020 on token issuers, Gensler’s approach often targeted market intermediaries for failing to comply with securities laws regarding registration and disclosure.
Meanwhile, Trump has nominated Paul Atkins, a former SEC commissioner known for his pro-crypto stance, to succeed Gensler. This transition is expected to lead to a more favorable regulatory environment for digital assets, potentially reducing enforcement actions against the industry. It’s a sharp contrast with Gensler’s more stringent regulatory approach.
In his remarks, Gensler expressed concern that many of the crypto projects currently in existence are unlikely to survive, comparing them to venture capital investments prone to high failure rates.
Despite criticism from the cryptocurrency community that classifying most crypto assets as securities has stifled innovation, Gensler defended his record in the interview. He asserted that the SEC’s actions were necessary to maintain market integrity and investor protection.
“I’ve never seen a field that’s so much wrapped up in sentiment and not so much about fundamentals,” he remarked, underscoring his belief that regulatory clarity is essential for the cryptocurrency industry’s future.
For more on what’s to come, read up on PYMNTS’ “Three Most Important US Crypto Policies to Watch This Year.”