The news: Block sellers completed more than 61 million transactions between Black Friday and Cyber Monday, per a press release. Afterpay helped drive spending: Online and in-person transactions using buy now, pay later (BNPL) grew 120% relative to pre-holiday levels.
Key context: Expectations for the holiday season have been muted, in part thanks to the longer shopping period and flat November sales year over year, per Adobe.
Trendspotting: Block’s results underscore two spending trends this holiday season.
Shopping small. Block’s seller mix skews small: In Q3 2022, 60% of Square sellers had less than $500,000 in annualized volume—though Afterpay likely brought some larger sellers into the mix. Strong performance across channels bodes well for SMBs who were concerned about the holiday season and corroborates Bankrate data showing 59% of holiday shoppers planned to purchase on Small Business Saturday.
BNPL. One in 5 consumers planned to use BNPL this holiday season, and another 20% were considering it, per an ETA/Strawhecker Group survey. Afterpay’s robust annual growth shows interest likely translated into action. As BNPL providers look for gains in a challenging environment, the holiday season could couple with growing consumer interest for a notable boost.
The bigger picture: Impressive SMB and BNPL performance reflects well on Block’s growth strategy, which prioritizes small and mid-market sellers and Afterpay as the brand tries to grow and unify its ecosystems.
More broadly, strong holiday performance could jump-start the results of payments players ranging from banks and card networks to merchant services providers. And trends like consumer interest in shopping at SMBs and BNPL growth could also help direct investment for the year to come as providers fine-tune their growth strategies to navigate a period of uncertainty.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.