How are BNPL demographics shifting among gen X and boomers?

There appears to be a transformative shift underway in the world of consumer finance. One that has the potential to reshape the way Gen X and Boomers approach their spending habits.

As the trend toward buy now, pay later (BNPL) services gathers pace, ModernRetail reports research showing its adoption among Gen X and Boomer consumers is on the rise1.

BNPL is an alternative payment method in which the consumer pays for goods or services in regular installments. It’s a type of short-term finance, where the lender pays the seller at the time of purchase and the consumer then repays the lender over an agreed period. This is typically over weeks or a few months but can be longer depending on the lender and the value of the purchase.

Understanding BNPL adoption among Gen X and Boomers

BNPL is becoming more popular among Gen X and Boomers – those born approximately between 1945 and 1980. However, the consumer behaviors and spending habits of these two demographic groups differ in some critical ways.

While Gen X are more likely to use BNPL for clothing and electronics, Boomers like to use BNPL for furniture and appliances. Figures from The Credit Economy Report2 on BNPL categories show:

Clothing: 17.7% Baby Boomers vs 21.1% Gen X

Furniture: 19.6% Baby Boomers vs 10.2% Gen X

Electronics: 4.6% Baby Boomers vs 7.4% Gen X

Appliances: 7.8% Baby Boomers vs 4.7% Gen X

The same report shows that Gen X consumers spend more on BNPL than their older counterparts, spending an average of $1,756 every year compared to Boomers’ $1,0402.

As older generations become more comfortable with BNPL, they may adopt it further. With more and more shopping now taking place online, consumers are increasingly likely to seek out this digital take on installment payments, such as PayPal Pay in 4..

In fact, the breakdown of PayPal Pay in 4 users shows more than 50% of Gen X PayPal Pay in 4 customers are repeat users, suggesting the shift in BNPL demographics already seen is likely to continue3.

Market implications: the BNPL landscape

Building on its initial popularity among younger consumers, the surge of interest from Gen X and Boomers marks a pivotal moment in the BNPL landscape. Accelerating digital adoption of BNPL among older generations could see their use of BNPL surpass that of Gen Z and Millennial consumers.

By 2025, eMarketer predicts that Gen X and Boomers will make up roughly one third of BNPL users4.

The increasing shift in BNPL demographics driven by the adoption of BNPL among Boomers and Gen X will drive adoption of BNPL services among businesses catering to these consumers. Many large retailers have already successfully adopted PayPal Pay in 4 such as Apple and Nike.

As confidence in BNPL grows, businesses should consider integrating BNPL services into their checkout processes to cater for changing consumer preferences and to attract a broader range of consumers.

Strategic insights: capturing the demographic

Understanding the unique preferences of Gen X and Boomers can help businesses inform their marketing strategies. By tapping into the experiences and aspirations of these two demographics, businesses can tailor their messaging to resonate with this audience.

Businesses should ensure their BNPL offering is transparent to foster security and reliability and further instill trust among older consumers. By aligning their values with those of their target demographic, businesses may gain a competitive edge.

Actionable strategies for businesses to consider include:

  • Present Pay Later dynamic messaging to promote relevant offers throughout the shopping journey
  • Collaborate with BNPL providers that are recognized, trusted, and have credibility
  • Be open and honest about the terms and conditions to help address concerns that Gen X and Boomer consumers may have
  • Personalize user experiences to enhance customer satisfaction and loyalty

Preparing for the evolving BNPL landscape

As BNPL services expand their reach to include Gen X and Boomers, businesses encounter distinct challenges that require a nuanced approach to risk management. The potential challenges may include:

  • Older generations are more likely to express concerns about data security. Being transparent can help foster trust and dispel worries
  • Older generations may need reassurance that the BNPL service meets regulatory requirements

PayPal has strategically positioned itself to address these challenges. PayPal Pay Later offers:

  • A user-friendly and familiar interface: PayPal's user-centric design caters to the preferences of older demographics to support a seamless consumer experience
  • Transparent terms: PayPal works hard to be clear on its terms, fees, and security measures to align with regulatory requirements and build consumer trust
  • Robust security: Leveraging state-of-the-art security protocols, PayPal prioritizes to safeguard consumer data, addressing the security concerns that may be more prevalent among Gen X and Boomer consumers

By recognizing changing consumer preferences, companies can adapt their BNPL offering to appeal to new market segments. Find out more about PayPal’s Pay Later services.

Was this content helpful?

Related content

Sign up to stay informed

Share your email to receive the latest enterprise updates, top stories, and industry reports.

*Required fields

We use cookies to improve your experience on our site. May we use marketing cookies to show you personalized ads? Manage all cookies