[INSIGHTS]: Buy Now Pay Later: a review of the market, risks and trends, consumer understanding, impact and outcomes

Report from Money and Pension Service around BNPL: link

Summary

The report provides an overview of the BNPL market in the UK, including the type of products and usage, potential risks and benefits, and the impact of BNPL on users’ financial wellbeing and the wider UK economy. It also identifies good practices and potential solutions that can be implemented to support BNPL users in managing their credit.

Key Points

  • BNPL products are popular among younger consumers, with 18-24 year olds being the most frequent users.
  • Consumers perceive BNPL products as convenient and flexible, but there are concerns about their impact on financial wellbeing and debt management.
  • The use of multiple credit products, including BNPL, can increase the risk of financial difficulties and debt problems.
  • Good practices in BNPL products include clear and transparent information, affordability checks, and responsible lending practices.
  • Potential solutions to support BNPL users include financial education, debt advice, and regulatory interventions.
  • The report highlights the need for collaboration between industry, government, and consumer groups to address the challenges and opportunities of the BNPL market.

Key Statistics

  • 39% of BNPL users have missed a payment or incurred a late fee
  • 18-24 year olds are the most frequent users of BNPL products
  • 25% of BNPL users have used the product to buy food and groceries

Key Take Aways

  • BNPL products are popular among younger consumers, but there are concerns about their impact on financial wellbeing and debt management.
  • The use of multiple credit products, including BNPL, can increase the risk of financial difficulties and debt problems.
  • Good practices in BNPL products include clear and transparent information, affordability checks, and responsible lending practices.
  • Potential solutions to support BNPL users include financial education, debt advice, and regulatory interventions.
  • Collaboration between industry, government, and consumer groups is needed to address the challenges and opportunities of the BNPL market.
See also  April 2023: Update and avoiding consumer harm

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