[Max Levchin:] “I do believe the age of credit cards is rapidly coming to — I wouldn’t call it an end, but a viable alternative in the buy-now-pay-later tools.”
A recent AfterPay report describes the average Gen Z consumer as a cautious spender, extremely active on social media, and wary of credit… Credit wariness could lead to Gen Z choosing BNPL tools as primary payment methods.
[Max Levchin, co-founder of PayPal and CEO and founder of Affirm:] “I do believe the age of credit cards is rapidly coming to — I wouldn’t call it an end, but a viable alternative in the buy-now-pay-later tools.”
Affirm, a BNPL company which has already partnered with over 6,000 merchants in the U.S., recently added ecommerce leader Shopify to the list. The partnership will allow Shopify users to pay in installments without interest.
Klarna, a leader in BNPL which just became the biggest fintech unicorn in Europe, is also working to catch Gen Z interest…
But it’s not that Gen Z is averse to credit. According to a recent TransUnion study, half of Gen Z respondents had a credit card with prime or above credit scores… Another survey by Manole Capital Management, a hedge fund focusing on fintech, found that out of 500 Gen Z respondents, ages 18-25, almost two thirds said they preferred traditional banks over fintechs.
[CEO of SplitIt:] “Research has shown that more than 70% of Gen Z students will graduate with student-loan debt. Layer that with the current economic crisis, this generation of consumers (many of whom are new entrants to a tough job market) are extremely budget conscious… Merchants that offer a responsible way to make purchases can win Gen Z shoppers’ loyalty and their business.”