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More than half say BNPL will replace credit cards
More consumers are relying on flexible payment options – like credit and Buy Now Pay Later (BNPL) – to make ends meet during the pandemic.
Consumers are flocking towards BNPL with over half (54 per cent) saying that BNPL will replace their use of credit cards, according to research from Marqueta, which also found more than one in three (35 per cent) saying they had tried BNPL for the first time during the pandemic.
The listed card issuing platform surveyed 1,000 UK consumers and found that despite recent warnings from the likes of Citizen’s Advice that BNPL can provide a slippery slope towards debt for some users, seven out of 10 consumers prefer BNPL options to credit cards due to affordability and ease of management.
Growth in the use of BNPL has been well documented, not least owing to the explosion of M&A, VC investment and launches in the BNPL space.
Perhaps unsurprisingly, this has occurred during the twin pandemic-driven trends of booming e-commerce and greater demand for credit. In the survey just under 3-in-5 (59 per cent) respondents say they have relied on credit to make ends meet during the pandemic.
Seven out of 10 consumers reported that they prefer BNPL options to credit cards, citing affordability and ease of management as key reasons.
Nonetheless, more than half (53 per cent) worry that it’s easier to fall into debt with BNPL compared with credit cards. Almost a quarter (23 per cent) of consumers said they have struggled to keep up with minimum monthly card payments during the pandemic.
“Credit cards and BNPL have provided a lifeline for many during the pandemic,” says Ian Johnson, SVP, Managing Director, Europe, Marqeta.
“The boom in online shopping due to global lockdowns – combined with the ongoing financial insecurity for millions of households – has created a perfect storm for the surge in BNPL and credit card use. Lots of people are living hand to mouth due to the financial strain of COVID and having flexible payment options has helped them to make ends meet – for example, by allowing them to purchase essentials when they need them, while paying for them at a time that suits.”