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Buy Now, Pay Later Plans Fuel Record Online Holiday Shopping

Consumers are expected to start holiday shopping earlier, but also shop less this year.
Plans that let US consumers pay over time helped generate a record $222.1 billion in online holiday sales Nov. 1 through Dec. 31. (Getty Images)

Plans that let US consumers pay over time helped generate a record $222.1 billion in online holiday sales Nov. 1 through Dec. 31, according to the latest Adobe Analytics report, up 4.9 percent from the same period in 2022.

Use of buy now, pay later financing plans hit an all-time high of $16.6 billion for e-commerce purchases in the last two months of 2024, Adobe said, 14 percent more than for last year’s holiday spending.

Discounts also drove end-of-year shopping, with Adobe reporting price cuts on electronics that were deeper than a year earlier. Toys and apparel also had significant discounts.

“In an uncertain demand environment, retailers leaned on discounting and flexible payment methods to entice shoppers this holiday season,” said Vivek Pandya, lead analyst at Adobe Digital Insights, in a statement.

A notable shift occurred in 2023, as holiday-season purchases from smartphones reached 51 percent, surpassing desktop and laptop sales for the first time, the report found.

The holiday shopping season continued trends that had been playing throughout the year. E-commerce prices have fallen for over a year now, according to the Adobe Digital Price Index, which tracks online prices across 18 product categories. And flexible payment plans accounted for a total of $75 billion in online spending in 2023, 14 percent more than in 2022.

By Diana Li

Learn more:

US Banking Regulator Warns on Risks of ‘Buy Now, Pay Later’

A top US banking regulator on Wednesday warned banks to manage the risks to consumers posed by increasingly popular “buy now, pay later” financing for retail spending, saying the service creates pitfalls for retail shoppers.

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