A survey conducted by Marqeta has shown that three in four Australians have increased their use of buy now pay later (BNPL) products during the pandemic, making them the global leader in BNPL adoption when compared the UK and US.
The company surveyed 1,000 Australian consumers to learn their attitudes towards credit products and how COVID-19 has impacted this. The results of the survey showed that Australians were attracted to the ease and affordability of BNPL solutions during the pandemic, with 72% of respondents saying they increased purchases with BNPL through the last 12 months.
The increase of BNPL in Australia was seen across all age groups and demographics. A total of 60% of Australians surveyed said they had used a BNPL solution, compared with just 47% in the US and the UK. A majority of Australian BNPL users, 60%, said they planned to replace their credit card completely in favour of BNPL solutions.
These results indicate a changing perception of credit cards for Australian consumers for more affordable options. Credit cards remain Australians number one form of credit, with 74% saying they use theirs regularly. However, 54% of Australians said they are turned-off by credit cards’ high interest rates. This comes at a time when a number of banks are releasing their own BNPL solutions such as Monzo and Curve.
Duncan Currie, Marqeta country manager for Australia and New Zealand comments, “We’re seeing a real shift in how consumers are wanting to pay in Australia, which is leading to a surge in buy now, pay later adoption. Not only are consumers going online more to make purchases during COVID-19, but they’re looking for the flexible payment options that Buy Now, Pay Later solutions provide.”
According to Marqeta, the survey shows that 72% of customers also said the pandemic has made them more conscious of their credit card balance. Almost a quarter of respondents said they have struggled more throughout COVID-19 to meet the minimum of their credit card payments and 60% said they have become more aware of budgeting over the past 12 months.
The survey highlights a need for change in credit card options. A total of 74% said they would be interested in a credit-like card option, which charges you like a debit account immediately, but helps to build your credit. In addition, 88% said they want the ability to personalise their rewards program, showing the growing need for modern and customised credit solutions.
“Australians are leading the charge when it comes to adopting new credit solutions, and credit card providers should take notice,” Currie added. “With 80% of consumers surveyed who use buy now, pay later solutions saying that they plan to continue to use them in the future, we expect financial services to continue to take notice of this shift in consumer behaviour and expect to see further innovation in the space.”