Cyber ​​Monday sales are driven by “buy now, pay later”

Editor’s Note: The story has been corrected to report total credit card debt for U.S. consumers.

On Cyber ​​Monday, the end of the shopping holiday, consumers are expected to spend between $12 billion and $12.4 billion, setting a new all-time record for the prominent shopping day, according to recent data from Adobe.

These forecasts, which beat Adobe’s previous forecasts, are driven by buy-now-pay-later (BNPL) options as Americans grapple with rising inflation.

According to Adobe, the flexible spending option is expected to see an all-time high on Monday, representing $782 million in online spending. This represents an increase of 18.8% over the same period last year.

Black Friday, the holiday shopping season, is off to a strong start

BNPL services, such as Afterpay or Klarna, allow shoppers to pay in weekly or monthly instalments. They are also marketed as “interest-free loans,” which is why they can be tempting for shoppers looking to stretch their budgets.

From Nov. 1 to Nov. 26, BNPL generated $7.3 billion in online spending, up 14% year over year, according to Adobe. On Saturday and Sunday alone, BNPL accounted for $760 million of the more than $10 billion spent, which is up 20% year over year, according to Adobe data.

This highlights how consumers are still trying to buy gifts while managing their debt obligations amid continued inflation, rising interest rates, and the resumption of student loan repayments. For example, Americans hold a record amount of credit card debt at about $1.08 trillion, according to a previous FOX Business report.

The US national debt reaches a record $33 trillion

More people are late to pay in advance

So far, spending during the first few days of Cyber ​​Week — the five-day period from Thanksgiving to Cyber ​​Monday — has already exceeded expectations.

A consumer uses a smartphone to shop online. (iStock/iStock)

Even on Thanksgiving, consumers spent $5.6 billion online, which is 5.6% more than the same period last year. A day later, on Black Friday, online spending reached $9.8 billion, up 7.5% year over year.

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Over the weekend, on Saturday and Sunday, spending reached $5 billion and $5.3 billion, respectively.

Adobe estimates that online spending during Cyber ​​Week will reach $37.2 billion, up 5.4% year over year.

Adobe data has not been adjusted for inflation. Adobe said that if online inflation is taken into account, there will be higher growth in consumer spending.