Buy now pay later (BNPL) statistics | 2020 - Finder UK
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Buy now pay later (BNPL) statistics | 2020

Everything you need to know about the rise of buy now pay later services in the UK.

Georgia-Rose Johnson
Georgia-Rose Johnson

Updated . What changed?

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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

  • 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.

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
Klarna 986,000
My Argos Card 435,000
Clearpay 298,000
Laybuy 162,000
Openpay 44,000

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
Dec 18 14,196
Jan 19 17,126
Feb 19 27,243
Mar 19 37,130
Apr 19 49,975
May 19 75,984
Jun 19 116,145
Jul 19 142,602
Aug 19 127,897
Sep 19 132,135
Oct 19 138,941
Nov 19 214,929
Dec 19 193,163
Jan 20 186,190
Feb 20 237,933
Mar 20 211,078
Apr 20 230,068
May 20 308,400
Jun 20 406,770
Jul 20 460,414
Jul 20 460,414
Jun 20 406,770
May 20 308,400
Apr 20 230,068
Mar 20 211,078
Feb 20 237,933
Jan 20 186,190
Dec 19 193,163
Nov 19 214,929
Oct 19 138,941
Sep 19 132,135
Aug 19 127,897
Jul 19 142,602
Jun 19 116,145
May 19 75,984
Apr 19 49,975
Mar 19 37,130
Feb 19 27,243
Jan 19 17,126
Dec 18 14,196

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.

Generational differences

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%
Millennials (1981-1996) 54%
Generation X (1965-1980) 37%
Baby boomers (1946-1964) 23%
Silent generation (1928-1945) 12%

Gender differences

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
Men 41%
Women 33%

Regional differences

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
London 48%
East Midlands 40%
South East 38%
North West 36%
South West 36%
Yorkshire and the Humber 36%
Scotland 35%
North East 34%
Northern Ireland 34%
West Midlands 33%
Wales 33%
East England 31%

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.”

– Elizabeth Barry, Finder's global fintech editor

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

Matt Mckenna
UK communications manager
T: +44 20 8191 8806
matt.mckenna@finder.com@MichHutchison/in/matthewmckenna2

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