UK Buy Now, Pay Later Financing Market Report 2025

Consumers see buy now, pay later (BNPL) as more than just a flexible way to pay, they associate the service with specific providers. In fact, most users report being more likely to shop at retailers that feature their preferred BNPL provider, highlighting how brand reputation and trust are crucial factors influencing consumer choice in the market.

However, overspending concerns have prompted regulatory action in the market. Regulation alone may not fully address consumer worries that BNPL is promoting excessive spending. To build trust, providers will need to focus on introducing budgeting tools and features that support responsible spending. This will demonstrate a genuine commitment to consumer wellbeing.

UK BNPL Market – Future Trends

Although BNPL is available for in-store purchases, it remains primarily an online payment method with most users engaging with it at online checkouts. However, there is significant consumer interest in BNPL cards and most believe that having access to a card would encourage them to use the service more frequently. Expanding card offerings could help providers become a more integral part of consumers’ everyday financial habits and increase their share of overall spending.

What is Buy Now, Pay Later Financing?

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.

Key Topics Analysed in the Report

• Market dynamics and the key macroeconomic factors impacting the buy now, pay later market
• Current usage of buy now, pay later, including existing users’ expectations of how this usage will change over the next 12 months
• Key motivations behind using buy now, pay later and the impact these have on marketing strategies
• Spending categories for buy now, pay later, and whether buy now, pay later use is considered for higher-cost purchases
• Barriers to adoption of buy now, pay later, including consumer concerns that it encourages impulsive spending
• Attitudes towards buy now, pay later, including the cost of living’s impact on its appeal and whether a physical or digital BNPL card would lead to more frequent use