INSIGHTS ¦ Buy Now Pay Later: Understanding and Addressing the Risks to Consumers – Technical Report



The technical report investigates the demographic and behavioural profiles of consumers who use Buy Now, Pay Later (BNPL) services. The report, prepared by Which? and executed by Opinium Research, aims to enhance understanding of BNPL users to inform potential regulatory measures by the Financial Conduct Authority (FCA). It presents a detailed analysis based on a bespoke survey of over 15,000 respondents, offering insights into the characteristics that correlate with BNPL usage.

Key Points

  • The survey defined BNPL distinctly to ensure accurate respondent understanding, differentiating it from other forms of retail credit.
  • Key indicators of BNPL usage include having dependent children, higher income, history of missed credit repayments, and recent stressful life events.
  • Older individuals, retirees, and those with higher education levels (A level or above) are less likely to use BNPL.
  • The survey was nationally representative, initially weighted by gender, age, and region, with additional weighting adjustments made to better represent the UK adult population by key demographic indicators.
  • Re-weighting the data slightly increased the estimate of BNPL usage from 31% to 33% of UK consumers.
  • Health conditions like visual and memory impairments were notably more prevalent among BNPL users, especially younger respondents.
  • The survey did not find significant differences in BNPL usage based on gender or broader ethnic categories.

Key Statistics

  • Over 15,000 adults participated in the survey.
  • Approximately 31% to 33% of UK consumers have used BNPL services.
  • Strong indicators of BNPL usage include having dependent children in the household and higher household income.
  • Less likely users include those older than 65, retirees, and individuals with higher education levels.
  • The survey data underwent re-weighting to better represent demographic factors like age, education, and income.
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Key Take Aways

  • Demographic Influence: Certain demographics, particularly younger adults with dependents, are more inclined to use BNPL services.
  • Income and Credit Behaviour: Higher income levels and a history of missed payments on other credit products are strong predictors of BNPL use.
  • Educational Impact: Higher education inversely correlates with BNPL usage, suggesting that financial literacy could influence credit choice.
  • Health Factors: Physical and mental health issues, particularly those affecting memory and vision, are associated with higher BNPL usage among younger demographics.
  • Necessity for Regulation: The detailed profiling supports the FCA’s consideration to regulate BNPL products to protect vulnerable consumers.
  • Impact of Re-weighting Data: Adjusting survey weights to more accurately reflect the UK population’s demographic profile provides a more precise estimate of BNPL usage.
  • Survey Design and Execution: Careful survey design and large-scale data collection enhance the reliability of insights into consumer credit behaviour.
  • Policy and Consumer Protection: The findings can guide policy decisions and consumer protection strategies in the rapidly evolving credit market.
  • Future Research: The demographic profile developed can aid in designing future quantitative research on consumer credit usage.
  • Standardisation and Clarity: Clear definitions and standardised survey methods are crucial for accurately assessing consumer credit behaviours.
  • Broad Implications for Credit Markets: Understanding BNPL usage patterns can inform broader credit market dynamics and consumer financial health strategies.
  • Educational Outreach: The inverse relationship between education and BNPL usage highlights the potential for targeted educational initiatives to inform consumers about financial products.

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