Buy now-pay later has taken the retail sector by storm in recent years and has made inroads into travel spending. Now BNPL providers are turning their attention to other markets such as healthcare.
Sezzle, which provides BNPL services to mega-retailer Target, among others, announced on Tuesday it had formed a partnership with WellNow Urgent Care, to provide interest-free loans at 118 clinics in New York, Ohio, Michigan and Indiana. Like other Sezzle customers, WellNow patients will be able to pay off their bills with four installment payments.
The service may attract people who have had difficulty affording adequate healthcare in the past. There were nearly 30 million non-elderly people in the U.S. in 2020 that the Kaiser Family Foundation said were uninsured, and 43% of adults between the ages of 19 and 64 surveyed by the nonprofit Commonwealth Fund that same year were underinsured against the costs of medical care.
WellNow provides treatment for minor ailments, such as allergies and burns, and also offers services for X-rays, lab testing and routine physical exams.
"At WellNow, our priority is to make healthcare more convenient, accessible, and affordable across the communities we serve, and this includes providing more financial options and flexibility," WellNow President Dr. John Radford said in the release. "No one should ever delay care because they're worried about their ability to pay at the time of service, so we've made it possible for them to pay in a way that works for them without the worry of interest fees."
Sezzle isn't the only BNPL provider looking to satisfy consumer demand for healthcare payment installment options. Citizens Pay and Affirm have also shown interest in providing such services.
Like other BNPL providers, Sezzle saw a spike in popularity last year as the COVID-19 pandemic increased online payments. Minneapolis-based Sezzle reported in an earnings release last month that it had 47,000 merchants making use of its site in the fourth quarter, a 76% increase on a year-over-year basis. Active customers rose 51.5% to 3.4 million, as of the end of last year, the company said.
Accenture estimated last September that BNPL spending had more than tripled since the start of 2020. The consulting firm also estimated at that time that BNPL would account for 6% of U.S. e-commerce sales in 2021, or $974.2 billion. By 2023, the firm predicted that figure will top $1.4 billion, or 13% of online shopping.
Consumer Financial Protection Bureau Director Rohit Chopra on Dec. 16 issued a series of orders to Affirm, Afterpay, Klarna, PayPal and Zip, requiring these big BNPL firms to provide information about their business practices.
Sezzle, which is a smaller player in the field, didn't get a request from the CFPB. Nonetheless, the business may be bigger soon. Australia-based Zip confirmed last month that it was in talks with Sezzle about a buyout.
Among the questions the CFPB is focused on are: how much debt BNPL users have racked up; whether operators have followed consumer protection laws; and what kind of data harvesting has been conducted by providers, some of which have shopping apps with merchant partners. Their deadline for a response to the agency is March 1.
