More than three quarters of UK businesses (78%) expect the use of Buy Now; Pay Later (BNPL) to increase as the cost of living and inflation rises, according to market research by international payment service provider and direct bank card acquirer ECOMMPAY in collaboration with Censuswide.
A huge majority of respondents from the finance sector (93%) expect their customers to increasingly rely on BNPL payments as the cost of living and rising inflation continue to haemorrhage people’s disposable income. This sentiment is also shared by respondents from the Travel & Aviation (94%), Manufacturing (80% Retail (79%) and IT (76%) sectors.
Regionally, an overwhelming majority of businesses from Greater London (88%), Northwest (84%) and Northern Island (83%) shared the view that the use of BNPL by customers would only increase as the cost of living and inflation begins to take its toll on consumers’ wallets. Additionally, a majority of large companies with more than 500 employees (90%) agreed that current living and financial conditions will result in BNPL becoming a more common form of payment among consumers.
The impact of the pandemic on payment methods
While the current cost of living, coupled with the rise of inflation, will make BNPL more attractive for consumers, results from the survey reveal that BNPL has surged in use during the pandemic. More than a third of businesses (36%) who offer Buy Now Pay Later (BNPL) as a payment option for their checkout saw a 41-50% increase in the use of BNPL from customers during the pandemic.
Further regulation of BNPL will not deter customers
As the use of BNPL becomes more widespread, there have been calls from government bodies to introduce tighter regulations on BNPL payment methods in order to protect vulnerable customers. However, a majority of business leaders surveyed by ECOMMPAY believe the use of BNPL will only continue to rise despite tougher regulations.
More than half (51%) of business leaders predicted the introduction of regulation to curb the use of BNPL would increase its use and 36% felt there would be no change. More than half of business leaders surveyed from the finance (62%), banking (58%) and retail (52%) sectors felt that BNPL would increase even with more stringent guidelines imposed on it. Across all respondents, only one in 10 (12%) felt that the use of BNPL among consumers would decrease if regulations were introduced.
Businesses see the positives of BNPL regulations
Governmental proposals for further regulation of BNPL were not viewed in a negative light for many of the business leaders surveyed. Over half of respondents (68%) felt that bringing in more regulations for BNPL would increase their trust in the payment method. This sentiment was most strongly held among the Banking (75%), Finance (75%) and Healthcare (73%) sectors.
Paul Marcantonio, Executive Director UK & Western Europe at ECOMMPAY said, “Given the current cost of living crisis engulfing the nation, BNPL has become an attractive option for consumers who wish to spread out their payments to ease the burden on their finances.
“However, government bodies are right to call for the need for regulation as BNPL should not become a catalyst for people spiralling into further debt.
“Companies have a responsibility to ensure they are carrying out affordability checks, adopting honest marketing, and doing any other necessary due diligence on borrowers. If brands are failing to do this, then it is only right that regulation is introduced.”