Web Hosting tutorials and tips.
This article was provided by eCom News.
‘Buy now, pay later’ (BNPL) is becoming increasingly popular. One in five UK consumers are planning to use these services during Christmas, to spread out the costs. But the increasing popularity has also caused an increase in outstanding debt amongst UK shoppers.
Retailers offering ‘buy now, pay later’ as a payment method might see their order numbers grow exponentially during the holidays. The payment method is becoming more and more popular. A couple of weeks ago, a study revealed that 36 percent of Gen-Z used BNPL in 2021, which was a six-fold growth since 2019.
22% of consumers plan to use BNPL
This week, BNPL provider Butter released a report stating that 22 percent of UK consumers are planning to spread the costs of their Christmas shopping with this payment method. Nearly 5.000 consumers were surveyed.
‘It’s hardly surprising that lots of us opt to spread the cost.’
A majority of 54 percent said that spreading the costs allows them to manage their finances better. “The older we get, the more we realize Christmas is about spending time with friends and family but for many, it can still be a very costly time of year. Overstretching financially can leave us facing a very long January and so it’s hardly surprising that in this day and age, lots of us opt to spread the cost rather than absorb it all during the month of December,” said Timothy Davis, CEO of Butter.
28% of UK adults used BNPL in October
These results are confirmed by other research, compiled by Equifax. When compared to 10 months ago, 2.6 million more people in the UK are using BNPL services. In October this year, 28 percent of the adult population made at least one purchase using this payment method, compared to 23 percent in December last year.
That consumers believe ‘buy now, pay later’ will soften the financial blow was also confirmed in the second study, where a fifth of 18-35 repeated this sentiment. At least 27 percent of them said they would struggle to afford Christmas without BNPL services.
UK shoppers racked up 4.7 billion euros in debt
With the recent growth in popularity, criticism about ‘buy now, pay later’ services has also grown. During the pandemic, shoppers in the UK have racked up more than 4.7 billion euros in outstanding debt after taking advantage of BNPL deals.
Klarna, the leading BNPL provider in Europe, has been on the receiving end of these criticisms. Within the UK, the Advertising Authority even banned some of Klarna’s ads. The company itself has argued that it offers customers the opportunity to pay in interest-free installments, while banks and credit cards use high interest rates.
‘BNPL can be a useful budgeting tool.’
“For switched on shoppers that want to smooth out their spending over the festive period, it can be an incredibly useful budgeting tool, and may soon even help those with thin credit files to build up a healthy credit score”, said Jayadeep Nair, chief product and marketing officer at Equifax. “However, as useful as ‘buy now, pay later’ can be, it’s important that shoppers don’t see it as a way to overstretch themselves in the coming weeks.”
I hope that you found the above useful or interesting. You can find similar content on our blog: https://www.hostfast.com/blog/
Please let me have your reaction below in the feedback section in the feedback section.
Let us know what topics we should cover for you in future.