Total UK BNPL transactions reached an eye-watering £6.4bn for 2020, or 5% of the e-commerce market, displaying a 60% to 70% growth on the previous year
The use of Buy Now, Pay Later (BNPL) financing is set to grow even further as its accessibility and ease of use continues to entice consumers. BNPL is a type of short-term financing that allows consumers to purchase goods and pay later, usually in a series of instalments, and often interest-freexix. The option is typically offered at the point-of-sale, helping businesses to increase basket size and prevent dropped basketsxx. Total UK BNPL transactions reached an eye-watering £6.4bn for 2020, or 5% of the e-commerce market, displaying a 60% to 70% growth on the previous yearxxi. The facility was initially popularised by the likes of Sweden’s Klarna (now valued at over $45bn) and Australia’s AfterPay, but there is soon to be a scramble for market share. While the rise of BNPL transactions shows no signs of stopping, it could soon be slowed by greater regulationxxii. As concerns have mounted about allowing such easy access to creditxxiii, governments look increasingly likely to introduce measures designed to inform and protect consumersxxiv. However, the Treasury have acknowledged the importance of BNPL and stated they will take a “proportionate approach”xxv.
xix https://www.investopedia.com/buy-now-pay-later-5182291 xx https://www.theguardian.com/business/2021/sep/18/the-surge-in-buy-now-pay-later-and-why-we-should-be-worried xxi https://www.ft.com/content/ddb2e207-2450-4ca8-bad0-871290d80ea7 xxii https://www.bbc.co.uk/news/business-59433904 xxiii https://www.theguardian.com/money/2021/oct/26/uk-shoppers-4bn-debt-buy-now-pay-later-deals xxiv https://www.gov.uk/government/consultations/regulation-of-buy-now-pay-later-consultation xxv https://www.bbc.co.uk/news/business-59433904