Consumers more likely to use Buy Now Pay Later for Christmas as the cost-of-living crisis hits

When evaluating to final 12 months’s spending habits, over half of shoppers usually tend to or are already utilizing Purchase Now Pay Later (BNPL) companies, in line with new analysis.

The information reveals {that a} quarter of shoppers, extra aware of their spending habits throughout the price of residing disaster, are extra doubtless to make use of BNPL for festive purchases this 12 months, while 27% of customers are already utilizing the cost possibility.

The information additionally reveals that buyers count on to spend, on common, £293 in complete for presents this Christmas. Over 1 / 4 of shoppers usually tend to purchase a high-value present, reminiscent of jewelry, if BNPL is obtainable as a cost possibility this festive season. Actually, customers who plan to make use of BNPL for vacation procuring are almost definitely to for bigger purchases – on common £325.

With the price of residing disaster mounting, the highest three objects customers would use BNPL for throughout the festive season are: electronics, garments & footwear, and toys.

The information additionally exhibits that whereas there was a gender hole with ladies extra doubtless to make use of BNPL, that is levelling out as males grow to be extra within the cost possibility this festive season. This pattern will proceed in 2023, as on common, UK shoppers plan to make use of BNPL for 16% of purchases. For males this rises to 19% of purchases, whereas for ladies it drops barely to 14%. Youthful age teams stay the demographic with the most important uptake of BNPL companies, with 16-34-year-olds almost definitely to make use of BNPL in 2023, for 30% of purchases.

Because the BNPL business grew rapidly and in the beginning of the 12 months, 51% of shoppers felt suppliers wanted to be regulated. To higher defend shoppers, rules have since come into impact and 37% of shoppers say they’re now extra inspired to make use of BNPL companies. Laws and monetary literacy help stay vital parts of accountable BNPL use, as the info exhibits virtually three in 5 shoppers really feel that BNPL encourages them to spend greater than they will afford, up from 54% in the beginning of 2022.

Paul Marcantonio, Govt Director UK & Western Europe at ECOMMPAY, who analysed the times, says: “Shoppers are anticipated to be extra cautious with festive spending this 12 months because the cost-of-living disaster impacts us all. New cost choices will probably be helpful for each companies and shoppers, as we navigate the 12 months forward. The information exhibits that buyers favor selection in terms of making funds, and companies should take observe or danger shedding out on key gross sales this golden quarter.

As a part of this, customers are exploring various cost strategies, reminiscent of Purchase Now Pay Later (BNPL). Whereas it’s encouraging to see extra consciousness amongst shoppers of the monetary options out there, BNPL comes with the inherent danger that customers can run up debt which can put them into issue later. Subsequently there’s a duty for suppliers to make sure they’re carrying the appropriate affordability checks earlier than lending.”