By 
Online purchases using the type of financing known as buy now, pay later jumped 68% during the week of Black Friday (Nov. 21 to Nov. 27) compared to the previous week, according to the latest Adobe Analytics report, published Monday morning.
Revenue from buy now, pay later — also known as BNPL — rose 72% week over week.
“In an uncertain economic environment, a more cautious consumer is embracing more flexible ways to manage their budget,” the software and market-research company said in a separate report Friday.
BNPL online orders increased 13% year over year in November, according to Adobe Analytics
ADBE,
-1.59%.
That figure did not take into account Thanksgiving or Black Friday spending.
Buy now, pay later, a new spin on the concept of layaway, has become increasingly popular among younger consumers. It allows consumers to split the cost of purchases into installments and charges them either simple interest or no interest at all, in a break from the traditional credit model in which interest compounds.
This form of online purchasing has proved popular in Europe and has recently gained traction in the U.S. for everything from Peloton
PTON,
+0.80%
equipment to household appliances.
“Experts caution that discounts should not tempt people to overspend over the holiday season.”
From 2019 to 2021, the dollar volume of buy now, pay later loans issued by five companies — Affirm Holdings Inc.
AFRM,
-3.82%,
Afterpay Ltd., Klarna, PayPal Holdings Inc.
PYPL,
-0.19%
and Zip Co.
ZIP,
-0.17%
— increased by 1,092%, from $2 billion to $24.2 billion, according to a report by the Consumer Financial Protection Bureau.
“Buy now, pay later is a rapidly growing type of loan that serves as a close substitute for credit cards,” CFPB Director Rohit Chopra told reporters at a virtual news conference in September.
“We will be working to ensure that borrowers have similar protections, regardless of whether they use a credit card or a buy now, pay later loan,” he added.
Online sales for Black Friday reached a record $9.12 billion, a 2.3% increase year over year, according to Adobe. However, Cyber Monday is projected to be this year’s “biggest online shopping day,” the company said, with online sales reaching $11.2 billion to $11.6 billion.
Erik Carter, a senior financial planner at Financial Finesse, a workplace financial coaching provider in El Segundo, Calif., advised consumers ahead of Black Friday not to allow discounts over the holiday season to tempt them to overspend.
Instead, he said, people should use Black Friday as an opportunity to invest in things that were already on their shopping lists.
(Emily Bary contributed to this report.)
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