Online retailers have begun to notice that more and more shoppers in the United States are opting for deferred payment when shopping for any stuff online. This can be explained by the difficult economic situation during the crisis, when many Americans were left without work and basic income. Such a service to buy things on credit with the ability to pay for purchases after a few months and a maximum term of up to 3 years appeared long ago on the US market.
Moreover, despite the lack of funds, customers of the online store bought more than usual, expecting to pay later. Financial experts explains this by human psychology. People spend more money when they don’t have to pay right away.
The number of retailers providing services on credit began to grow even before the crisis, both in the luxury and mass segments. The pandemic, in turn, pushed Americans to such deferred payments, which are especially convenient to carry out online, and resulted in the development of platforms for buying on loan over the Internet.
They allow you to pay for selected items after a few weeks or even years, depending on the amount of online payday loans in Virginia that is debited from the card on the appointed day. Experts associate the growth in the volume of services in the field of lending with the fall in real income in crisis, as well as with the transition of trade to online, where buyers are psychologically inclined to spend more.
For brands, loan payments are an opportunity to retain customers who have temporarily lost their jobs, or attract those whose income has fallen. Some of people with a desire to buy any stuff on credit, make up their minds to issue small loans. They start searching as much info as possible about payday loans Bluefield, VA, payday loans Woodbridge, VA, payday loans Roanoke VA, payday loans in Farmville VA, payday loans Richmond, they open one and the same website to enrich their knowledge for online lending options.
During the crisis period, Asos online store, cosmetics companies La Mer, Drunk Elephant and Sephora, as well as clothing brands American Eagle, The North Face and Adidas joined the brands providing this lending service. Special services allow their customers to pay for purchases on credit: the Australian Afterpay, whose revenue during the self-isolation regime more than doubled compared to 2019 – up to $ 3.8 billion, as well as the Swedish Klarna and the American Affirm.
During the crisis, more people began to calculate the weekly budget. The ability to postpone payment for the purchase until better times without financial loss comforted them.
The first deferred payment services were launched after the 2009 recession, so they have yet to experience the full impact of a weakened economy. Industry experts predict that not all promised payments will go to brands if people never return to work or lose it again. One way or another, credit shopping services are pushing people to spend more than they can actually afford. However, the entire financial burden of unpaid money will fall on the services, and not on the brands. However, buyers are likely to blame the seller for potential pennies and penalties.
Such services already appeared during the Great Depression in the United States in the early twentieth century, but fell into disrepair with the advent of credit cards. In the 80s of the twentieth century, retailers issued their own credit cards, the popularity of which declined in 2009 due to the recession, when many payments began to be delayed.
However, modern services rely on millennials and representatives of generation Z, who have weak purchasing power now and do not have credit cards, although in a couple of years they may become quite solvent customers. According to experts, deferred payment platforms solve this problem: they provide an opportunity for young people to spend now and pay after they achieve economic independence. This means that you will not have to beg your mother for your birthday, but you can buy expensive sneakers to paying for them in 5 years.