When Walmart announced it was ending its layaway program for the majority of its store categories in favor of a buy now, pay later format, social media users expressed their confusion and sadness with nostalgic tweets.
Retail experts and financial lending providers aren’t surprised by the shift. In fact, some are even saying that buy now, pay later is the new layaway.
WALMART DITCHING LAYAWAY OPTION FOR 2021 HOLIDAY SEASON
"Consumers increasingly want to be able to take home their purchase right away, and then pay for it in installments," Floris de Kort from Xplor Technologies told FOX Business. "Buy now, pay later means they can do just that, and need no longer wait for their purchase to be fully paid for, before they experience their product or service."
Walmart partnered with Affirm to start its buy now, pay later financing program. Other big-box retailers like Target and Macy’s have partnered with competing financial lending providers, including AfterPay and Klarna.Ticker Security Last Change Change % AFRM AFFIRM HOLDINGS 132.75 +5.14 +4.03% AFTPY AFTERPAY 79.28 +2.34 +3.04%
Customers who make purchases through these third-party lenders generally get their items interest-free, so long as the items are paid off before the end of the promotional period.
"Often, [buy now, pay later] involves four equal installment payments made every two weeks until the loan is paid off," said Matt Schulz, a chief credit analyst at LendingTree. "Buy now, pay later loans also include longer-term financing offered at the point of sale. Depending on the size of the purchase,...