The demographic breakdown of PayPal Pay in 4 users

Young shoppers have been quick to adopt Pay in 4^1,2, PayPal’s fast-growing buy now, pay later (BNPL) service, which provides a convenient credit alternative at the point of sale. However, older shoppers are also showing strong interest in the payment solution.²

Pay in 4 is a PayPal Pay Later option that customers can use to pay for purchases in four interest-free payments – and new research about the offering confirms the popularity of BNPL across all age groups.² PayPal analyzed 289,000 BNPL users in the United States from January through December 2022.2 Of the PayPal Pay in 4 users, 51% were millennial and Gen Z shoppers, while 35% were Gen X.²

Research across three other BNPL providers tells a similar story. Millennial and Gen Z shoppers made up between 50% to 60% of BNPL users, with Gen X representing 30% to 35% of users.²

Younger shoppers are attracted to the flexibility and convenience of BNPL

With 72.2 million millennials and 68.6 million “Zoomers” in the United States alone,³ large enterprises should start thinking about the best ways to cater to millennial and Gen Z payment preferences and trends – or potentially miss out on millions of transactions.

There are many reasons why millennials and Gen Z are attracted to BNPL:

• It serves as a budgeting tool. Of millennial and Gen Z users, 77% say that BNPL helps them budget and manage their cash flow.⁴ They can use the payment option to spread payments over time without interest, which enables them to budget accordingly.
• It’s an alternative to traditional credit cards, charging no interest and no late fees for short-term offers. Of Gen Z users, 24% reported using BNPL to avoid revolving debt.⁵

And on the flip side, these users may take their money elsewhere if the option isn't available. In fact, 71% of millennial and Gen Z BNPL users abandoned a purchase because the payment option wasn’t available.⁴

Gen X’s growing interest in BNPL

While millennials and Gen Z use BNPL regularly, new research also suggests that an older generation is beginning to embrace this payment option.² The fastest-growing age group to adopt BNPL is Americans over 55, or Gen X, which saw growth of nearly 100% from 2020 to 2022.⁶ As the generation that grew up with layaway plans and offline credit card programs, Gen X comprises 35% of PayPal Pay in 4 users, up from 30% just a year before.⁷ And since Gen X spends more money annually than millennials, large enterprises would be remiss to ignore this age group’s preferences.

There’s no doubt that the PayPal suite of Pay Later products has seen extensive adoption across all age groups:

• 75% of millennial Pay Later users are repeat buyers⁷
• 65% of Gen Z BNPL customers are repeat users⁷
• More than 50% of Gen X Pay in 4 customers are repeat users⁷

Large enterprises can cater to customers of all ages by incorporating PayPal’s Pay Later payment options into their checkout process. As more customers get comfortable with this digital take on installment payments, businesses can rely on PayPal to give shoppers the flexibility and convenience they want from their payment experience.

Contact our sales team to learn how PayPal’s Pay Later products can work for your business.