Home Business News Shoppers plan to use the BNPL payment option more due to the increasing cost of living

Shoppers plan to use the BNPL payment option more due to the increasing cost of living

by LLB Finance Reporter
24th Nov 23 10:51 am

New research from leading international payment service provider and UK and Europe direct bank card acquirer, Ecommpay, reveals that men are more likely to use Buy Now, Pay Later (BNPL) (44%) compared to women (35%) this Black Friday.

When asked why, two in five consumers (39%) cited the increasing cost of living and inflation as their reason for using BNPL services more in 2023 – with expected use up from 35% in 2022.

Originally an American shopping event, Black Friday has caught the attention of many hoping to secure a bargain in the UK in recent years. In fact, almost one-third of consumers who shopped Black Friday deals last year (28%) are planning to increase their spending as they navigate rising prices this year.

With consumers spending an average of £101.18 during 2022’s Black Friday, retailers will welcome this boost to spending. Men in particular are most likely to increase their spending during this year’s shopping event (34%) and they also spent more last year, averaging £134.72.

Continuing to look specifically at repeat Black Friday shoppers, almost half plan to use BNPL for their purchases this year (44%). This has jumped from 36% in 2022.

Younger generations are most likely to explore BNPL options for their shopping with 58% of consumers between 25 and 34 years of age, and 57% of those between 35 and 44 planning to use the credit service for Black Friday purchases as they navigate the impact of the cost of living crisis. This drops from over half to around a third of consumers between 45-54  and less than a quarter of consumers aged 55+ (38% and 20% respectively).

Karan Johal, Head of Commercial at Ecommpay said, “Black Friday is an important and competitive sales event for retailers, so being able to offer their shoppers payment options that suit them is vital to convert those purchases.

“Buy Now, Pay Later has been met with challenges but in the face of rising inflation, is a useful payment option that enables shoppers to manage their cash flow. Responsible lending is vital and it is encouraging to see consumer confidence growing enabling everyone to navigate the cost of living crisis.”

Regulations increase shopping confidence

Early in 2023, it was announced that BNPL lenders would now be subject to FCA regulatory oversight. Most consumers are now aware of these new regulations (56%), with 30% of shoppers feeling more comfortable using the service.

Men are more likely to be aware of regulations (61%) and more confident using the payment option (33%). While most business leaders (62%) say they feel more comfortable offering BNPL as a payment option after learning of the upcoming regulations.

Interestingly fewer consumers now feel BNPL encourages them to spend more than they can afford, this figure has dropped from 58% in 2022 to 52% in 2023 signalling greater confidence is building with the latest regulatory intervention.

Although 45% of consumers feel further BNPL regulations are still required, this is dropping year-on-year from just over half in 2022 (51%). While men, the most frequent users of BNPL, feel slightly more strongly about wanting more regulations (51%).

More businesses offer BNPL

Businesses are meeting this increasing confidence by investing in offering the payment option. The majority of business leaders say their business now offers BNPL as a payment option for their checkout (59% vs 42% in 2022).

Almost three-quarters of businesses that offer the payment option (73%) say they have experienced more of their customers using the option as inflation increased. So, with a competitive golden quarter well underway, most businesses (65%) who offer BNPL at checkout plan on promoting its use for Black Friday.

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