BNPL users expected to hit 900m by 2027

The number of ‘buy now, pay later’ users is set to reach more 900 million around the world in the next five years.

According to new research by Juniper, the number will grow from around 360 million at present – an increase of 157 per cent – in a move driven by the forecasted economic downturn.

This looming recession and current cost of living crisis will lead to even more of a demand for low-credit cost solutions, research suggested, and see an increasing number of consumers turning to short term loan products.

The research also found that the country with the largest potential for rapid growth in BNPL is India, with users predicted to grow from a current 25 million to a whopping 116 million over the next five years.

The Far East and China and Latin America follow as regions with predicted rapid growth to 2027.

Juniper’s research also suggested that the adoption of virtual cards, where digital only cards are used for purchases, will increase the use of BNPL.

With the regulation in many countries already struggling to keep up with the current rate of growth in the BNPL market, this trajectory could prove worrying.

In the UK, not all BNPL products are regulated by the Financial Conduct Authority, and Credit Karma research from just a few weeks ago showed that 41 per cent of BNPL users struggled to make a repayment, up on just 11 per cent from last year.

It also found that more than half of people in the UK now see BNPL as a “lifeline” during the current economic crisis.

Part of this growth in adoption comes from the feeling of an increase in regulation, with 61 per cent of BNPL users saying they feel more confident using the services following the announcement that payments will be reported to credit reference agencies.

But the full impact of new regulations will not come into full effect until later next year.