UK Buy Now Pay Later Financing Market Report 2024

Get ahead in the UK buy now, pay later (BNPL) market with this comprehensive report. Know how and why consumers use BNPL, how the market is performing, and key player strategies to inform an effective strategy for your business.

UK Buy Now Pay Later Financing Market – Current Landscape

During uncertain economic times, cost-effective credit options form an important part of consumers’ finances. The last two years of rising prices have affected the ability to spend and save, which has led to a growing use of BNPL. The product’s instalment structure can help people better manage their cashflow.

Despite strong consumer intention to use the product over the next year, only 30% of UK adults believe BNPL is easy to understand. This implies a wide knowledge gap and a need to improve education around the product’s benefits and potential risks.

With the government confirming that BNPL will be FCA-regulated within the next two years, brands have an opportunity to pre-empt the introduction of regulation by ensuring robust affordability checks are already embedded in checkout processes. This will help improve the industry’s reputation and trust levels, which have recently been subject to negative press stories.

UK Buy Now Pay Later Financing – Market Statistics

• Type of BNPL financing used: While BNPL customers make the most of the product’s short and long-term flexibility, three-quarters of BNPL users pay in short-term instalments.
• Reasons for using BNPL: 53% of BNPL customers like how BNPL enables them to spread the cost of purchases, which is the leading reason for using BNPL.
• Future BNPL purchasing plans: A third of UK adults are likely to use BNPL to make a purchase in the next 12 months, with most who have used BNPL in the past planning future BNPL purchases.

UK Buy Now Pay Later Financing Market Report – What’s Inside?

Key Topics Analyzed in the Report

• The impact of the economic climate and taxation on buy now, pay later financing.
• The types of consumer credit used in the last two years.
• The terms and interest of BNPL products used in the last two years.
• Consumer interest in using BNPL for different types of purchase.
• Reasons why users opt for BNPL financing.
• Consumer intention to use BNPL in the next year.

Report Scope

This Report explores the buy now, pay later financing market and uses the following definition:

Buy now, pay later financing is a payment option that lets consumers buy products or services without paying the total amount upfront. This means a purchase can be paid off in fixed instalments over time. Some BNPL arrangements do not include any interest for a certain period, although late fees can be applied if repayments are missed. Interest charges can also apply to longer-term agreements.

BNPL services, such as Clearpay and Klarna, are popular among consumers and businesses, particularly online retailers, since they offer convenience and flexibility to consumers, while helping businesses increase sales, boost average transaction numbers, as well as attracting new customers.

Other brands offer alternative regulated instalment credit options, such as Monzo Flex, which provide users with added consumer protection.

Meet the Expert Behind the Analysis

This report was written by Lewis Cone. Lewis joined Mintel in May 2013 having graduated from the University of Southampton with a 2.1 BSc (Hons) degree in Economics and writes a range of industrial reports, from occupational health to the house building market.

BNPL is gaining popularity for its simplicity and flexibility, particularly among young and less affluent users. Upcoming regulations aim to enhance consumer protection.

Lewis Cone
Associate Director – Financial Services