The use of buy now, pay later (BNPL) credit has experienced a significant surge in popularity in the UK, with approximately 15 million individuals currently utilizing this payment option. This represents a 23% rise compared to the previous year, as per a study conducted by Klarna and Equifax. The research, which involved interviews with 2,000 consumers and data analysis from nearly 9,000 current accounts, found that 28% of adults made at least one repayment using BNPL last month, indicating a growth of 2.6 million individuals in the past year.
Notably, BNPL services are no longer limited to specialist companies like Klarna and Clearpay. Even traditional banking giants like Barclays have recently entered the sector, highlighting the increasing mainstream adoption of this payment method. Furthermore, a large number of fashion retailers and brands now offer BNPL options, both online and in-store.
While BNPL has gained popularity, it has also faced criticism for potentially encouraging consumers to make purchases beyond their means and tying them into credit agreements. However, proponents argue that the payment method encourages responsible borrowing and provides a cheaper and more transparent alternative to credit cards.
The study’s findings also reveal that consumers are borrowing more through BNPL compared to the past. The average payment amount has increased from £120.35 in December of last year to £125.32 last month. With the festive season approaching, it is projected that one in ten shoppers plan to use BNPL to finance their Christmas purchases. Additionally, 27% of respondents stated that without the ability to pay later, they would struggle to buy everything they desire.
In conclusion, the popularity of BNPL credit has skyrocketed in the UK, with millions of individuals embracing this payment option. Despite concerns about potential disadvantages, consumers continue to opt for BNPL due to its convenience and perceived advantages over traditional credit cards. As more fashion retailers and businesses incorporate BNPL services, it is clear that this payment method is here to stay.
Useful links:
1. Klarna – Klarna’s official website providing more information about their BNPL services.
2. Clearpay – Clearpay’s official website offering details about their BNPL options for consumers.
