Travel now, pay later has existed at least as long as the credit card, but the concept is rapidly modernizing as buy now, pay later (BNPL) pushes deeper into the travel and hospitality space this year, helping operators fill airplanes and rooms as inflation slows pandemic recovery.
The latest development came Monday (March 7), as BNPL provider Sezzle and payments platform Yapstone announced a new partnership around vacation rentals.
According to a press release, “In partnership with Yapstone, Sezzle will serve a growing, global market of consumers looking to budget vacations. In a 2021 user survey, one in three Sezzle users reported that they would like to utilize Sezzle for travel, while over 81% agreed they would vacation more often if merchants accepted Sezzle.”
It’s one of several such agreements coming together in the travel and hospitality sector over the past year as airlines, lodgings firms and their payments partners jumpstart a recovery.
American Airlines and Affirm were among with first, announcing the launch of flexible payments to eligible travelers in October.
PYMNTS research consistently finds that merchants and brands offering installment options are in demand, especially among younger cohorts and those with dealing with financial struggles.
According to The Second-Chance Consumer: How Buy Now, Pay Later Payments Create New Merchant Opportunities, a PYMNTS and Sezzle collaboration, “second-chance” consumers with good incomes but low credit scores are a prime audience for BNPL credit.
Per that study, “a second-chance consumer is not necessarily a consumer who would be an unreliable or undesirable shopper. We found that 65% earn more than $50,000 per year, with 30% earning above $100,000. The average second-chance consumer is 44 years old and has a FICO score of 662 — just 38 points shy of what usually is seen as a ‘good’ credit score.”
Get the study: The Second-Chance Consumer: How Buy Now, Pay Later Payments Create New Merchant Opportunities
Seizing Travel’s BNPL Moment
Sezzle, which was recently acquired by rival BNPL firm Zip, and Yapstone see the opportunities in serving both recovering consumers and Yapstone clients in the travel sector.
Sezzle Chief Revenue Officer Veronica Katz said, “In partnership with Yapstone, Sezzle aims to serve consumers as we come out of the pandemic and demand for travel rises. Yapstone opens the door to thousands of vacation rental options, and we look forward to bridging their community of shoppers with Sezzle’s responsible, budget-friendly financing solutions.”
Monday’s news from Sezzle and Yapstone comes as several other travel industry sectors and players tap into installments to help get the travel recovery off the ground in 2022.
BNPL provider Uplift signed two deals early in 2022, the first in January with Southwest Airlines offering installments on flights to Hawaii, the second in February with Canada Jetlines.
See also: BNPL Firm Uplift Teams With Southwest Airlines on Hawaiian Travel
On Feb. 17 Delta Airlines announced it is adding American Express’ on-card buy now, pay later feature Plan It® as a checkout payment option at Delta.com.
According to a press release on that pact, “According to an American Express survey, 68% of Gen Z and Millennial travelers surveyed say they would be more likely to take trips to their dream destinations if they knew they could pay for the flights over time.”
See also: Delta Launches BNPL Offering With AmEx
Travel industry site TRVLguides reported that “As of January 2022, Airbnb does not accept payment from third-party ‘Buy Now Pay Later’ companies such as Klarna, QuadPay and AfterPay.”
However, Airbnb rival Vrbo announced a deal with Affirm in 2021.
In a press release on that agreement, Vrbo Vice President of Product Management Mike Sutter said, “Vrbo has been connecting families with vacation homes for over 25 years, and we can now provide even more value to our customers by being the only vacation rental platform to offer payments over time with Affirm. This benefit enables families to plan and book future vacations now and pay for them later.”
See also: Affirm Teams With American Airlines to Bring BNPL Option to Travelers