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Comment by fastaguy88 | Hacker News Reader

Another percent-based set of statistics that tells us nothing.

How many Americans were using buy-now pay-later a year ago? 10,000? 50,000? (out of 200 million). A 40% increase in market share from what? A market share of 0.0001%? Did the BNPL amount stay the same, and the market shrink (and what is the market -- on-line purchases or total grocery sales?) And there are 10% more orders, but 19% less revenue. So perhaps fewer people are paying more because of inflation, or more, how can we tell?

Perhaps written by Chat-GPT with the proviso that no actual information be provided.

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The article notes:

> everyday BNPL orders, including groceries, accounted for barely 1% of all [BNPL] purchases in 2021.

Presumably the share for groceries alone didn't increase meaningfully in 2022, or that would have been noted for effect, so we're looking at less than 1.4% of all BNPL payments for groceries. Of course, there was also the secular increase in online grocery orders:

> This trend may be partly due to the fact that Americans are simply spending more money on groceries online. Online grocery spending grew by nearly 27% year over year to $8.4 billion in February.

>> everyday BNPL orders, including groceries, accounted for barely 1% of all purchases in 2021.

> Presumably the share for groceries alone didn't increase meaningfully in 2022, or that would have been noted for effect, so we're looking at less than 1.4% of all BNPL payments for groceries.

It could just mean that BNPL as a product was not much used a couple of years ago, no? It could just mean that these folks would merely then put their groceries on a revolving credit card (which in many ways is worse). It doesn't necessarily mean folks are shifting to riskier forms of debt?

Ah, my pull-quote is confusing because it leaves out the context that the denominator here is all BNPL purchases, not all purchases.

That said, you're right that this could also just be a product of new offerings, as BNPL in point-of-sale systems is newer than BNPL online.

The online grocery stat really surprises me. Relative to pre-pandemic? OK, seems high but I can buy it that a lot of people tried it and some liked it enough to keep it. But YoY from February, at a time when grocery prices have increased a fair bit, is almost hard to believe. "Grocery prices are up so lets make them go up even more for a bit of convenience."

IMO, that growth makes sense given:

1. Lower friction because more stores offer free/cheap delivery with decent CX (maybe also wider SNAP acceptance?)

2. Higher opportunity cost for low-income shoppers because of labor market gains (maybe also higher gas prices?)

3. Lingering wariness of high-touch public spaces (not sure about this one, but I still see masks here in Seattle)

The pandemic created a big pull-forward in this demand, but it wouldn't surprise me to see the trend continue.

I'm mostly not understanding it relative to early 2022. If someone wasn't using it in February 2022, why now? Yeah, partly a labor market thing. Maybe partly a more people back to offices so don't have as much free time.

My general observation is that not as much changed because of the pandemic as people thought would happen. But grocery delivery is something that does seem to have had gains. (Not sure about food delivery outside of the sort of deliveries that have long existed. And meal kits never really took off even during the pandemic.)

> 1% of all purchases in 2021.

Percent of purchases seems like the wrong statistic. It is likely the case that most purchases are very small, people buying a single pack of cigs at a gas station and things like that. Furthermore, people with a lot of money likely make more purchases than people with little money. The percentage of the population making such everyday BNPL purchases is the interesting statistic, and I suspect it is higher than the % of all purchases.

Also, where to credit cards, effectively BNPL fit in? I mean, almost all my purchases are on CC, and mostly/usually paid before balance due just for the relative discount/rewards. Ironically those rewards out of tx fees, and subsequent higher pricing because of it.

According to the linked CFPB survey[1], 17% used BNPL at least once (and only 3% used it six times or more), so the percentage of the population using it for everyday purchases is probably small.

[1]: https://files.consumerfinance.gov/f/documents/cfpb_consumer-...

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