Despite the pandemic keeping many homebound for a prolonged period, plastic surgery grew to new heights from 2020-2021, with 70% of surgeons reporting an uptick in bookings. Driven predominantly by millennials and Gen Z—with an unapologetic approach to such procedures compared to their parent generations—the rise of remote work and frequent use of video calls led several individuals to become more aware of their appearance on camera, driving the desire to improve the look of even the smallest perceived flaws. Further fueling growth, the flexibility of time spent at home allowed for more discreet recovery, which influenced many to undergo treatments they may have previously postponed. Combined with the increase in disposable income spending from reduced travel and leisure, the demand for aesthetic enhancements soared during the pandemic and is yet to slow almost five years later.
“While the explosive growth seen during the pandemic may have stabilized, the demand for aesthetic procedures remains comparatively robust when set against pre-Covid data,” reads the Global Survey on Aesthetic/Cosmetic Procedures 2023 Report from the International Society of Aesthetic Plastic Surgery (ISAPS). As stated by ISAPS, there has been a 41.3% rise in aesthetic procedures performed worldwide in the past four years, contributing to the medical aesthetics market size of $16.14 million in 2023, which is expected to reach $17.5 million by the end of 2024, continuing to grow at pace to an estimated value of $36.16 million by 2033.
Forget the Filler
The rise of aesthetic surgeries can also be attributed to decreased noninvasive treatments such as filler, due to changing aesthetic trends. Last year, it was reported that the number of people who had filler injections decreased from the previous year by 26%. Arguably, the influence has come from following several celebrities including Kylie Jenner and Molly-Mae Hauge publicly discussing their choices to dissolve their filler, seeking a more natural look as a result of troublesome “filler migration,” where the face puffs due to filler from one spot moving to another.
While the growing trend of filler dissolving may seem to nod towards a movement of embracing natural beauty, many are now seeking “undetectable surgery,” going under the knife to obtain an “untouched” look. Driven in part by speculation around celebrities including Christina Aguilera and Lindsay Lohan, who appear to have embraced subtle enhancements that maintain a soft aesthetic, the undetectable surgery trend reflects a broader shift in the beauty industry where the goal is to look refreshed and youthful but not noticeably “done.” Common procedures include face and eye lifts, as well as Botox alternative Xeomin. With public figures showcasing these subtle changes, the demand for cosmetic procedures that offer more natural results has grown, appealing to individuals who want to enhance their appearance without the stigma or telltale signs of surgery.
The New Normal
Although undetectable surgery is benefiting patients who want to keep their alterations under the radar, several others receiving treatment do not shy away from sharing their journey, especially online. Alan Matarasso, MD, Clinical Professor of Surgery at Hofstra University, spoke of the changing attitude towards surgery compared to when he opened his private practice in NYC a few decades ago. He explained that back then, nobody wanted any suggestion they had received surgery. “I literally put in a back door [at the practice] because people didn’t want to walk in the front,” Matarasso says. “Now, with the rise of social media, people are in the recovery room, posting about what they went through and sending pictures to friends that show the bandage on their nose.”
A study by dermatologists at Boston University Chobanian & Avedisian School of Medicine revealed that 58% of 175 people surveyed have thought about cosmetic procedures due to following celebrities and influencers on social media who share their stories about the topic. The researchers also found that respondents who followed accounts that highlight cosmetic procedures (such as those that analyze before and after pictures) were far more likely to want to undergo surgeries.
Buy Now (Look Better), Pay Later
The normalization of surgery through social media is influencing those who would not have previously considered procedures to explore their options. However, for most social media users, the cost of aesthetic treatments is often not as accessible as they are for celebrities and influencers with a wage above average. Cost continues to be a large barrier stopping those who show an interest in aesthetic treatments from actually going ahead with their plans. In fact, 71% of potential patients state that cost is often the biggest barrier to moving forward with procedures. As a result, many patients are turning to “buy now, pay later” (BNPL) models to finance their cosmetic surgeries. BNPL loans drove $75 billion in online spending in 2023, up 14.3% from 2022, according to Adobe Analytics.
The most commonly known BNPL model for cosmetic treatments is CareCredit, traditionally used for out-of-pocket medical procedures, which is accepted at over 260,000 locations nationwide. Currently, there are over 12 million CareCredit holders, with the company seeing significant growth in the post-pandemic world, especially from those seeking BNPL for cosmetic procedures. Jill Behm, who works at Synchrony (the bank that offers CareCredit to customers), explained that once a background check on a customer's finances is completed, they are given a line of credit to use towards their elective cosmetic procedure. Once approved, customers are issued a card attached to said line of credit. Promotional financing solutions are then explored with the customer looking to pay for cosmetic care over a set period of time.
BNPL for cosmetic procedures allows patients to undergo surgery almost immediately while spreading the financial burden over time. This flexibility is becoming especially appealing to the younger, social media-focused generation that is accustomed to using common BNPL services such as Klarna to make everyday purchases from fashion to technology. BNPL for cosmetic surgery is slowly emerging as a wider trend and has recently been picked up by various finance conglomerates beginning to gain traction among consumers.
Fintech Focus
Fintech lender Affirm began quietly offering BNPL loans for elective medical procedures earlier this year, in a move that the company described as “a major push beyond the core e-commerce market.” As part of the expansion, Affirm has partnered with Weave, a customer relationship management (CRM) platform for small- and medium-sized healthcare businesses, as a distribution partner. According to Reuters, over the past year, Affirm has more than doubled the number of elective medical merchants in its network, reaching 130 at the end of 2023, with the intention to tap into the growing demand for financing cosmetic treatments.
"A lot of these [cosmetic treatment] price points are about $2,000 and above, so that suits our installment product really well," Pat Suh, Affirm's Senior Vice President of Revenue comments.
While Affirm did not disclose the average interest rate it charges customers for medical purchases, it said that nearly half of its transactions—a higher proportion compared to other categories—are at 0% APR. According to the Consumer Financial Protection Bureau (CFPB), other BNPL options such as CareCredit typically waive interest payments for a promotional period, before transitioning to the annual interest figure of 27%. “Being able to shift consumers away from paying these types of high interest and deferred rates into a product like ours, we think there’s a lot of value to that,” Suh added.
Another payment company investigating BNPL options for cosmetic treatments is San-Francisco-based Cherry Technologies. Currently, Cherry Technologies offers deals to patients who can break large procedure costs of up to $30,000 into smaller, more manageable monthly amounts. Payment plans range from 3 to 60 months, with 0% APR options. According to the company, Cherry is the preferred BNPL partner for over 20,000 practices nationwide, due to having a high approval and low-cost business method, which sometimes does not require prior credit checks.
Cherry Technologies began working with Barclays PLC in June on a potential healthcare asset-backed deal and is said to be continuously lining up investors. The deal would be backed by consumer loans that Cherry would give to consumers for cosmetic surgery, dental, or medical aesthetic procedures. If a deal were to happen, Cherry would be tapping into the growing asset-backed securities market. According to data from Bloomberg, sales of asset-backed securities in the US are up by 20% compared to this time last year.
Around the same time, AbbVie company Allergan Aesthetics announced a national rollout of its Alle Payment Plans powered by Cherry Technologies, hoping to help consumers overcome the cost barrier to facial injectables such as Botox. Alle Payment Plans initial pilot program revealed that 54% of transactions were from patients new to aesthetics or trying a new service, and 34% of transactions included two or more brands, proving that removing cost barriers gives more consumers the opportunity to access aesthetic treatments.
"Our practice began accepting Alle Payment Plans as part of a pilot program. Since then, we've seen an influx of patients who want to pay over time and are now interested in learning about additional treatments to help achieve their aesthetic goals," says Neekan Rivera, PA, Allergan Medical Institute Trainer and founder of Aère Aesthetics. "Alle Payment Plans quickly became a seamless part of our front desk experience, and our patients earn Alle points for their treatments."
Privi Financial is another name on the roster of fintech companies expanding services into BNPL for cosmetic services. The company offers payment plans to consumers “in seconds” and promises no monthly interest. The maximum amount per aesthetic treatment transaction through Privi is capped at $5,000, but consumers are able to have a total spend several times this figure within a year. Since launching in early 2024, reports confirmed that as of March 2024, Privi had seen a total of 6,750 members sign up, and over 1,860 members transacted, amounting to $1.3 million in treatments funded since starting out at the beginning of the year.
Rounding up the Risks
While BNPL is a positive win for both patients and practices, it does of course come with a perceived downside. In particular, many are worried that the surging growth of BNPL across different industries may contribute to the evolving consumer debt crisis. As reported by Reuters, several US borrowers on lower incomes are increasingly struggling to keep up with their BNPL loan payments. In these uncertain financial times, the Bank of America reports that charge-offs and debts unlikely to be recovered rose to $1.5 billion in Q1 of 2024, up $807 million from the previous year. As well as this, according to the CFPB, BNPL borrowers are more likely to have lower credit scores and lower savings on average. Additionally, BNPL lenders are said to have “very little insight into borrowers indebtedness.”
Essentially, while a payment plan can democratize access to plastic surgery for those who would otherwise not be able to afford treatments, it can also be a gateway to financial stress if not handled correctly. “One of our long-standing concerns is a cumulative impact of multiple buy now, pay later loans on top of other expenses and debt obligations, which could really push the consumer into over-indebtedness and financial distress," said Delicia Hand, Senior Director at Consumer Reports.
Despite the concern, there are safety precautions in place. According to Affirm, the company tends to only lend to “near prime and prime” borrowers, with credit scores around 620 and 719. The company explains that it only lends what customers can repay, and total charges are disclosed upfront without any late or hidden fees. Additionally, if a BNPL payment is missed when borrowing from Privi, the patient will not be able to receive their next treatment until they are up to date on all money owed.
The increasing availability of BNPL services for aesthetic treatments has made cosmetic procedures more accessible than ever, helping to sustain continued growth for this sector of the industry. As cosmetic trends continue to chop and change over time, the demand for easy and flexible ways to pay for them is shaping the future of cosmetic surgery, broadening the sector's potential patient base, while increasing revenue. However, while BNPL may seem a convenient option, it raises important questions about financial responsibility, as well as the pressures of aesthetic standards and the true cost of beauty. As the industry continues to advance, it is crucial to find a balance between the desire for accessibility and responsible financial plans, which are both essential to sustaining growth while safeguarding consumers' well-being and financial status.
