Rising Popularity of Buy Now, Pay Later Services in the UK

According to research by Clearpay, a leading Buy Now, Pay Later (BNPL) service, 30% of British adults have used BNPL to make at least one payment over the 12 months ending August 2023. The study found that BNPL usage is increasing among all age groups, but it is particularly popular among Millennials and Gen X, with usage rates of 41% and 36%, respectively.

BNPL as a Stress Reducer

The research, part of the ‘Economic Impact of Clearpay in the UK’ report, also found that BNPL can alleviate financial stress. Nearly four out of five (78%) respondents stated that BNPL services helped them manage the cost of large purchases, while two-thirds (65%) said that BNPL eased the stress of festive spending.

Compared to credit card spending, 45% of respondents found BNPL less stressful, while only 10% said they found credit cards less stressful. This disparity reveals the perceived advantages of BNPL over traditional credit methods.

BNPL vs Traditional Credit Options

A significant 78% of respondents found BNPL cheaper than other credit payment options, and a similar percentage (77%) said it helped them avoid high-interest credit card debt. These figures rose to 83% and 81%, respectively, among Clearpay customers.

The study also highlighted the transparency and ease of use of BNPL. A striking 86% of respondents were able to anticipate payments accurately, and four out of five (80%) said they did not struggle to make their payments.

The Decline of Traditional Credit Usage

The growing popularity of BNPL methods in the UK coincides with a decline in the use of more expensive credit options. Data from the Bank of England showed that while the proportion of UK households using BNPL has grown since 2020, both credit card and overdraft usage have seen slight declines.

Clearpay’s Economic Impact in the UK

Beyond individual users, BNPL also has a significant economic impact. Since August 2022, Clearpay has contributed nearly £1 billion (£940 million) in additional sales to its UK merchants and saved them a collective £100 million through benefits like lower fraud rates, improved order processing, and inventory management. The company has also supported 11,000 jobs across the UK through its merchant partner businesses, their supply-chains, and wage-spending stimulated economic activity.