Clearpay, a leader in Buy Now, Pay Later (BNPL), has today published research revealing that BNPL use is rising across all age groups, with 30% of British adults using the service to make at least one payment over the 12 months ending August 2023.
BNPL was most popular among Millennials and Gen X[1], at 41% and 36% respectively.
The ‘Economic Impact of Clearpay in the UK’ report, produced in conjunction with Oxford Economics, highlighted how BNPL helps mitigate financial stress as a driving factor for use. Nearly four in five (78%) of respondents said that the service helped them reduce the stress related to the cost of large purchases, while a further two-thirds (65%) said that it helped mitigate the stress associated with festive spending.
Respondents expressed that BNPL helped them reduce financial worries, especially when compared to credit card spending. 45% of BNPL customers surveyed perceived the tool to be less stressful than credit card borrowing, compared to just 10% who said they found credit cards the less stressful option of the two.
Significantly, nearly four in five (78%) respondents said they found BNPL cheaper than other credit payment options, with a similar proportion (77%) indicating that it helped them avoid high-interest credit card debt. When focusing on Clearpay customers surveyed, these values increased to 83% and 81% respectively. Ease of use and transparency was also highlighted by respondents, with 86% able to anticipate payments correctly and four in five (80%) indicating that they did not struggle to make their payments.
Rich Bayer, Clearpay’s UK Country Manager, said: “Fresh data like this is incredibly valuable for the future of the UK credit market, as it tracks the impact of the latest payment innovations. Thanks to BNPL, splitting a purchase over multiple payments no longer has to come with the stress of high-interest rates or the risk of revolving debt. It’s no surprise that it has now become a preferred everyday payment option trusted by consumers from all generations.”
The growth in popularity of BNPL payment methods in the UK comes as the use of more expensive credit options continues to stall. Bank of England[2] data indicated that, while the proportion of UK households using BNPL has grown at pace since 2020, both credit card and overdraft usage have seen small declines over the same period.
The report also examined Clearpay’s economic impact in the UK. Since August 2022, the company was found to have contributed nearly £1 billion (£940 million) in additional sales to its UK merchants, as well as making them collective savings of £100 million[3] through gains such as lower fraud rates, improved order processing, inventory management, lower marketing costs, lower default rates and lower returns.
Researchers also calculated that the incremental sales enabled by Clearpay had supported 11,000 jobs throughout the UK in that period, across merchant partner businesses, their supply-chains and through economic activity stimulated by employee-wage spending.