Gen Z Will Reach Record-High Usage of Buy Now, Pay Later (BNPL) Services This December, According to New Report

An anonymous data analysis of US social finance app Frich’s community of 700k+ Gen Z’ers reveals that the second week of December sees the highest use of buy now, pay later services such as Klarna. BNPL spending next week is expected to rise beyond last year’s mid-December spike, as Gen Z heads into Christmas with higher debt levels compared to 2023.

 The analysis also reveals that Gen Z are feeling more stressed about holiday shopping, with a significant increase in their usage of BNPL services and credit cards compared to last year.

‘Klarna Week’

• Frich’s modelling predicts that based on last year’s patterns and a significant uplift in BNPL spending in 2024, Gen Z is expected to hit record-high BNPL usage during ‘Klarna Week,’ starting December 9th
• Gen Z’s usage of BNPL services this holiday season has risen by 31% compared to the same period in 2023
• Despite usage of BNPL being on the rise, only 12% of Frich users are willing to admit to regular use of these services when polled

 Holiday Anxiety: How Gen Z is Footing the Bill

•  52% of Gen Z are more stressed about affording holiday shopping this year than in 2024
• Gen Z’s credit card payments have risen by 49% in 2024 compared to 2023
  • Additionally, late fee payments on credit cards have increased by 14% in comparison to last year’s figures
• In order to combat inflation and reliance on BNPL and credit cards, more than 50% of Gen Z have purchased ‘dupes’ when online shopping
  • Similarly, 50% have purchased ‘fake luxury items’ to save money

• Despite shifting purchasing habits away from full-priced items, 53% of Gen Z already regret something they bought during Black Friday weekend in 2024

Frich is a social finance app which enhances the financial literacy of Gen Z by providing users with raw, authentic insights into their peers’ financial habits. By collecting anonymous data and opinions from users across various cities and tax brackets, users can benchmark themselves against real data from their peers. Since launching in 2021, Frich has raised $2.8M from notable investors including Antler, Restive Ventures and TruStage. The app has partnered with university-based credit unions such as MSUFCU, banks like ZYNLO Bank (a division of PeoplesBank) and fintechs Fundrise and Acorns to offer concrete financial knowledge to students and to connect traditional financial institutions with a younger demographic. 

Katrin Kaurov, CEO and Co-Founder of Frich, comments: “The holidays can be a stressful time for many young people and students, but it’s not a time to completely forget about healthy financial habits. While buying on credit certainly isn’t a new thing, buy now, pay later services can lull users into a false sense of security and convince them to develop unsustainable financial habits. Buying on credit or using a BNPL service is most effective when making large purchases, and it’s not really intended to be used for smaller purchases like holiday gifts. There can be a negative impact on your credit history, so it’s best to be careful and properly evaluate your choices when spending.”