“BNPL (Buy New Pay Later)” is what we call buy now, pay later. This payment method is becoming more and more popular around the world, especially in Europe.
Merchants that offer BNPL payment methods can see their order volume skyrocket during the peak season. A study shows that in 2021, 36% of Generation Z used BNPL, a six-fold increase from 2019.
Butter, one of the providers of BNPL, released a survey report, in which nearly 5,000 consumers were surveyed. Among them, 22% of British consumers said that they planned to pay by BNPL to share the cost of Christmas shopping.
54% of the respondents said that sharing costs allows them to better manage their finances. Butter's CEO believes that excessive financial strain will make consumers face a long January. Therefore, at present, many people will choose to share consumption costs in the form of installments instead of spending all their money in December.
In addition to bringing convenience to everyone, this payment method has also attracted a lot of controversy. During the epidemic, British consumers have accumulated more than 4.7 billion euros in outstanding debt after using BNPL transactions.
Klarna , the leader of BNPL services in Europe , said it has accepted the suggestions and criticisms of the society for this service. The company said that using banks and credit cards will incur high interest rates, and BNPL services provide customers with the opportunity to pay in interest-free installments, which is still helping them reduce their burden. Currently, in the UK, the Advertising Authority has even banned some of Klarna 's advertisements.
Despite the ongoing controversy surrounding BNPL, we are currently in the peak holiday shopping season and the temptation of interest-free installments is indeed great for consumers.
Compared with the previous 10 months, the number of people using BNPL services in the UK increased by 2.6 million. In October this year , 28% of adults used this payment method to make at least one purchase. In December last year, the proportion was about 23%. At least 27% of consumers believe that they will find it difficult to afford Christmas expenses without BNPL services.
According to the survey, consumers are most likely to purchase food, clothing, technology, household goods and entertainment through BNPL services.
The scope of BNPL services is still expanding. For sellers, introducing this payment method can attract more consumers to shop. However, they will also face a series of financial problems caused by consumers' overspending and inability to repay debts. How to solve this problem in the future requires further waiting and observation. BNPL U.K. |
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