Keen to jazz up your weekly meals, the healthy way? Our shopping experts can help you source your dream air fryer from a range of the best retailers.Read more…
Buy now pay later (BNPL) statistics | 2020
Everything you need to know about the rise of buy now pay later services in the UK.
Updated . What changed?
Buy now pay later (BNPL) is currently the fastest growing online payment method in the UK, with a growth rate double that of bank transfers and more than triple that of digital wallets. Buy now pay later is a service that allows consumers to shop online and place and receive orders while paying for them later.
We carried out some research to see if buy now pay later providers are disrupting the credit card industry and how we pay for products.
What's in this guide?
- Quick overview
- Which are the most popular buy now pay later companies?
- The increasing popularity of buy now pay later
- Who is using buy now pay later?
- Shoppers' use of buy now pay later during lockdown
- Why shoppers use buy now pay later
- Bad news for the credit card industry?
- Criticisms of buy now pay later
- Almost 4 in 10 (37%) Brits say they have used a buy now pay later service.
- Over half (52%) of BNPL users are using these services more during the COVID-19 period.
- BNPL is most popular amongst millennials, with 54% using this payment method.
- Klarna was the most popular BNPL app, with 460,000 active monthly users in July 2020.
- 44% of shoppers use BNPL for its ease and convenience.
- Online purchases using buy now pay later services are growing at a rate of 39% per year.
- Almost ten million (9.5 million) Brits said that they avoided buying from retailers that don’t offer BNPL options at the checkout.
Which are the most popular buy now pay later companies?
There are numerous different buy now pay later platforms, but which ones are the most popular? In terms of app downloads in the UK from January 2020 to the end of July 2020, Klarna was the most popular, with 986,000 downloads. This is more than double the number of downloads of My Argos Card (435,000), which was the next most downloaded BNPL app. In third place was Clearpay (298,000), followed by Laybuy (162,000) then Openpay (44,000).
|Company||Number of app downloads, January-July|
|My Argos Card||435,000|
The increasing popularity of buy now pay later
Online purchases using buy now pay later services are growing at a rate of 39% a year, with market share set to double by 2023. In fact, nearly 9.5 million Brits said that they avoided buying from retailers that don’t offer BNPL options at the checkout. This popularity looks set to continue, with 8.6 million Brits (13%) planning to use BNPL services more in the future.
The number of UK brands offering buy now pay later options is also increasing, making it a viable way to pay for a lot of goods. For example, Klarna saw a 20% increase in UK brands using its service during April 2020. This is understandable, as BNPL options benefit retailers by increasing customer loyalty and basket conversions and boosting sales by up to 30%.
The rise of Klarna in the UK
Klarna is based in Sweden but is growing rapidly in the UK. In March 2020, it announced that it had reached 7 million UK users, twice the amount that it had at the same time last year.
In the UK, the Klarna app (on both iOS and Android devices) has experienced a substantial increase in monthly active users. In just a year and a half, there has been a 3,143% increase. In December 2018, the app had 14,000 active users per month, and by July 2020, this number had risen to 460,000.
Find out which shops accept klarna payments
|Month||Monthly active Klarna users|
Who is using buy now pay later?
BNPL is a rapidly growing online payment method, with 37% of Brits saying they have used buy now pay later, according to our research. But who is behind this recent growth? Find out the differences between generations, genders and regions in the UK below.
According to our research, younger generations are far more likely to use buy now pay later services. The generation using BNPL the most is millennials (1981-1996), with 54% using this online payment method. Generation Z is also following this same trend, with 50% saying they use buy now pay later. It’s no surprise that younger generations can’t seem to get enough of BNPL. Klarna, Clearpay and Laybuy are all highly active on social media, marketing themselves to millennials and generation Z through organic and targeted ads, to great effect.
Older generations are also using buy now pay later methods, but not to the same extent. For example, only 23% of baby boomers and 12% of the silent generation use these services.
|Generation||Proportion using BNPL|
|Generation Z (1996+)||50%|
|Generation X (1965-1980)||37%|
|Baby boomers (1946-1964)||23%|
|Silent generation (1928-1945)||12%|
Our research found that buy now pay later services are more popular with men than women, with 41% of men saying they use them, compared to 33% of women.
|Gender||Proportion using BNPL|
Our research also found that the use of buy now pay later services varies across different regions of the UK. London has the greatest percentage of buy now pay later users, with 48% of Londoners using this payment method. This is followed by residents of the East Midlands (40%) and the South East (38%).
The region with the lowest percentage of BNPL users is East England, with only 31% of residents ever using buy now pay later services.
|Region||Proportion using BNPL|
|Yorkshire and the Humber||36%|
Shoppers’ use of buy now pay later during lockdown
According to our 2020 research, just under two-thirds (63%) of people are not currently using buy now pay later services. This leaves around 19.4 million people (37%) who have used or are using them.
Of those using this type of payment method, 36% said they are using them the same amount as they were before lockdown. Over half (52%) of BNPL users are using these services more during the COVID-19 period, with 32% saying they will continue to do so and 20% saying they will use them less often after COVID-19. 12% of BNPL users said they have used these services less over lockdown, but some of these people (4%) said they are likely to use them more in the future.
|How much are shoppers using BNPL services?||Percentage|
|Using them less in lockdown but will use them more often in the future||4%|
|Using them less in lockdown and will continue to do so||8%|
|Using them more in lockdown but will use them less often in the future||20%|
|Using them more in lockdown and will continue to do so||32%|
|Using them the same amount as before lockdown||36%|
Why shoppers use buy now pay later
We also analysed the main six reasons why shoppers are using buy now pay later services. Our data shows that the main reason that people are using buy now pay later is because of its ease and convenience (44%). The ability to spread costs over time is the next most popular reason (41%), followed by interest-free payments (39%) and the ability to pay for purchases that individuals couldn’t afford otherwise (30%).
|Why do shoppers use BNPL services?||Percentage|
|They're easy and convenient||44%|
|I can spread costs over a longer period of time||41%|
|To access interest-free payments||39%|
|To pay for purchases I couldn't otherwise afford||30%|
|To try on items that are delivered to me before I am charged for them||28%|
|I don’t want to use or take out a credit card right now||27%|
Bad news for the credit card industry?
With job losses and economic uncertainty rife during the COVID-19 period, consumers have been playing their finances safe. For example, credit card spending fell by 50% at the start of lockdown. While the cancellation of holidays is one plausible reason for the decline, there’s evidence for another, which is that a notable number of consumers were looking to alternative payment options instead.
Our research found that over a quarter (27%) of Brits who have used BNPL services more recently – or plan to do so – cited not wanting to use or take out a credit card as a reason for choosing these services. There was a difference between generations as well, with a third (31%) of generation Z citing this as a reason, compared to under a quarter (23%) of generation X.
Additionally, we found that barely half of millennials own a credit card (51%), compared to 71% of generation X. Of the millennials who don’t have a credit card, 93% never plan to take one out.
- 27% of Brits who use buy now pay later services cite not wanting to use a credit card as a reason.
- Around of half (49%) of millennials don’t own a credit card.
- Of those millennials who don’t own a credit card, 93% plan to never take one out.
Millennials and gen Z have definitely shown an aversion to credit and a willingness to adopt alternative payment methods, particularly BNPL. Younger generations look at this payment method like a budgeting tool, and many see credit cards as an easy way to get into debt.”
Criticisms of buy now pay later
The offer of interest-free instalments and no hidden fees allows shoppers more flexibility but also can lessen their perceived risk of debt, and lead to overspending and ensuing problems. This has drawn criticism for the BNPL industry from the media and certain charities.
Finder research found that 41% of those who are increasingly using BNPL cited the ability to spread the cost of payment over time as a key factor, while 30% claimed to use it to pay for purchases they can’t otherwise afford.
The FCA is not currently regulating BNPL services (beyond those offering finance) but has said that consumer credit is one of five priorities for its Business Plan in 2020-21, so it is likely to be monitoring what happens in this area.
For all media enquiries, please contact
See if you can get your next ShopDisney order for less with our hand-tested voucher and promo codes.Read more…
Desperate for a new but affordable laptop? Shop from our pick of the best tech retailers selling cheap laptops.Read more…
See if you can get your next Dell Small Business order for less with our hand-tested voucher and promo codes.Read more…
See if you can get your next coursesonline.co.uk order for less with our hand-tested voucher and promo codes.Read more…
Calling all fashion misfits! If you love Dolls Kill, you’ll want to know all about these similar UK stores.Read more…
More guides on Finder
Cryptocurrency statistics 2021
We explore the latest statistics in the world of cryptocurrency including who is and isn’t buying cryptocurrency, as well as who has made their millions off these virtual currencies.
Buy now, pay later platforms to face stricter regulation
The FCA is set to introduce tighter controls for buy, now pay later firms like Klarna and Clearpay.
Black Friday Klarna deals live now: Where to shop with Klarna this Black Friday
Looking to buy now but pay later in the Black Friday sales? Here’s where you can shop with Klarna for the best Black Friday deals and discounts.
Buy now pay later with these Black Friday deals
Looking to shop this Black Friday without breaking the bank? Here’s where you can buy now and pay later with some killer Black Friday deals and discounts.
Buy now, pay later mattresses: Where can I buy a mattress on finance?
Find out where you can buy now, pay later for your new mattress with finance options including Klarna, Clearpay, Laybuy and direct financing.
How many people are still using bank branches in the UK in 2020?
Are people still using bank branches? Is your area being affected by bank branch closures? Find out the latest data here.
Banking statistics UK | 2020
What are the biggest and most famous banks? Which banks are winning and losing customers? How are opinions about banks changing? We have collected all the latest banking statistics here.
Flava review: Get your groceries now, pay later
Flava offers a pay later service different to any other in the UK, with a focus on groceries. Find out about hidden fees and credit checks in our review.
Splitit review: Pay for online shopping later, on your terms
Here’s everything you need to know about Splitit, which helps you to split payment for your online shopping orders into manageable chunks.
Full list of stores that offer Splitit in the UK
Discover which UK retailers offer Splitit, a retail payment platform that allows you to buy now and pay later for your next online shop.
Ask an Expert