Buy now, pay later (BNPL) is becoming one of the fastest-growing payment methods in Europe, with adoption increasing not just among younger consumers, but their older cohorts as well.
According to a recent report from Auriemma, more than half of cardholders (54%) under the age of 35 have used at least one BNPL service. Separate data from UK Finance revealed that pensioners using a BNPL service doubled in 2022 compared to the prior year.
The Auriemma survey found that respondents were keen on BNPL and overall, had a positive experience using this particular payment service. Indeed, 91% of respondents agreed.
“Undoubtedly, BNPL is becoming a popular product in Europe,” said Ben Danner, Senior Analyst of Credit and Commercial at Javelin Strategy & Research. “We believe the surge in adoption to be due in part to the cost-of-living crisis in the UK, high inflation, and overall economic pressures as consumers tend to rely on credit products more when times get tough.”
“Many BNPL providers are offering zero interest loans, and in times where interest rates are increasing, these loans could give consumers much needed flexibility,” he said.
BNPL Advances and Tighter Regulations
Given the current economic climate, consumers are more conscious about their spending.
BNPL services are not only continuing to gain ground worldwide primarily because they offer consumers convenience and flexibility but having the ability to break down small or large ticket items into smaller payment installments is appealing to consumers who are mindful of their budgets.
However, while there’s an allure to BNPL services, it’s not all sunshine and rainbows. In fact, more consumers are finding themselves more in debt or falling into financial traps because of the lack of transparency around the terms and conditions of BNPL services. For the most part, they’re complex and difficult to understand.
As such, there’s been a call for regulation by many governments, including the British government, who are aiming to treat BNPL services the same way credit products are treated.