Buy Now Pay Later Statistics

Scott

Janine

· Feb 6th, 2024

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In this guide, we focus on the fast-growing Buy Now Pay Later (BNPL) payment method in the UK. If you’re trying to handle a BNPL debt, you may have some questions and worries.

You’re not alone. Each month, over 170,000 people visit our website seeking advice on debt solutions.

This guide will explain the following:

The key points about BNPL
How to handle BNPL debt
The effect of BNPL on your credit score
The role of BNPL in retail
Where to find expert help

If you’re feeling stressed about not being able to pay a BNPL debt or worried about late or missed payments, we understand. This guide is designed to provide clear advice and to help you find a way forward.

Let’s start exploring the world of BNPL.

Buy Now Pay Later Stats

By 2022, approximately 360 million people around the world had used BNPL.
In 2021, 12% of UK residents (approximately eight million people) had used BNPL services. By 2022, this increased to more than 17 million.
16% of all 18-34-year-olds have used BNPL.
In 2022, credit cards were the most popular method of paying back BNPL.
In 2020, the global BNPL market was worth $87.2 billion.
In 2021, the global BNPL market was worth $125.09 billion.
In 2022, the global BNPL market was worth $179.5 billion.
Between 2022 and 2025, the global BNPL market is expected to reach a value of $531.53 billion.
By 2027, it’s expected that there will be 900 million BNPL users around the world.
From 2023, the UK government intends to regulate the BNPL market.

Between 2022 and 2025, the global BNPL market is expected to reach a value of $531.53 billion.

Is buy now pay later good for retailers?

A recent report has shown that over two-thirds of retailers in the UK in 2022 reported an improvement in their sales when they offered buy now pay later schemes.

However, more than half of retailers surveyed said that they would not be offering buy now pay later as a payment method. This is probably due to this payment method not being relevant to the services that the retailer provides.

However, this reluctance could also be due to the financial trouble customers will face if they miss any instalments. From my experience, this can quickly lead to a horrendous debt spiral. The type of credit that buy now pay later offers can also open up businesses to unnecessary credit risk.

Can buy now pay later affect my credit score?

Yes, buy now pay later can affect your credit score.

Lenders or creditors use your credit report to determine if you are a ‘high-risk’ customer – someone who is likely to have difficulty paying their bills on time. If you miss some BNPL payments and your account gets sent to a debt collector, this will be flagged.

Understandably, a credit company will be reluctant to give you credit.

Lots of BNPL credit and borrowing can also be looked at negatively because it can suggest that you are living beyond your means.

However, if you are careful with your money, you might be able to use BNPL to build up some positive credit history. BNPL companies now share their information with credit reference agencies, which means that lenders can see this information on your report.

Evidence that you have stuck to your original agreement and other positive credit history interactions look good to new lenders. This can make it easier for you to get better credit rates in the future.

Buy Now Pay Later FAQs

What is the most popular buy now, pay later app?

In the UK, Klarna is the most popular BNPL app, followed by Clearpay. 61% of all BNPL users have purchased an item with Klarna or Clearpay.

Do buy now, pay later do credit checks?

Buy now pay later providers may do a credit check before approving your application. If you have a bad credit score, then it’s unlikely you’ll be approved for BNPL.

Can using buy now pay later harm your credit score?

Buy now pay later can harm your credit score if not used responsibly. However, if you make all of your payments on time, then this will not be a problem.

What happens if I miss a buy now pay later payment?

If you miss a scheduled payment then you’ll generally incur a late payment fee. A missed payment can also be harmful to your credit score.

If you reach the end of your agreed repayment period and you still have an outstanding balance, then you may be required to pay a settlement fee or have a lump sum of interest added to the debt.

References

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