Open Invoice, Installments and Gen Z

Giorgi Shakarashvili

Open Invoice, a classic ‘Buy Now, Pay Later’ (BNPL) method, and Installments are among the most popular payment methods in Germany. Once introduced by catalog houses such as Otto or Quelle, the popularity of BNPL now extends far beyond its original market.

It can rightly be called a trend in the payment world. More and more online stores worldwide are integrating ‘Buy Now, Pay Later’ into their checkouts. This development is also evidenced by a recent study by Bilendi. Around 2,400 German shoppers took part in the study at the beginning of 2021.  It was particularly striking that 40 percent of young shoppers between the age of 18-22 prefer to pay on open invoice. This type of deferred payment is also gaining ground internationally, especially among young people. What is the reason for the sudden increase in popularity of this payment method, which was previously regarded as outdated?

1. Security

Open Invoice works completely without account or credit card data. Many shoppers are afraid of interest and hidden fees – these simply do not occur with Open Invoice. The transfer of data is almost always encrypted and the general security conditions in online shops are also high.

2. Flexibility

Especially in the area of clothing, shoppers on large platforms are used to choosing between different sizes and brands. Jeans, for example, can be purchased in several sizes and from different manufacturers. Only Open Invoice gives shoppers the chance to check out the goods before they have to pay for them. This gives shoppers enough time to see whether the size and cut of the desired item fit and appeal to them.

3. Control

In online retail, German shoppers have a 14-day right of withdrawal. Even with other payment options, they get their money back if they return an item. In the case of clothing, for example, an average of half of the goods ordered are returned to the online store. With Open Invoice, however, young shoppers do not have to pay the full value of their shopping cart in advance. They also don’t have to wait for refunds of amounts they have already paid.

4. Trust

New online shops open every day and offer interesting products. Far too many to check in a timely manner. How sure can shoppers be that their purchase will be delivered correctly? In this case, Open Invoice serves as a basis of trust between the customer and the merchant. This reflects sufficient financial strength, as well as reliability and an interest in long-term customer loyalty.

For a long time, the Open Invoice was considered to be originally German, old-fashioned, and more suitable for a conservative, older target group. However, BNPL methods also offer many advantages for younger shoppers in and outside Germany, who are increasingly recognizing these advantages and making greater use of the payment method accordingly. In the future, it will be almost indispensable for online stores to integrate BNPL methods into their checkouts.