New research shows the dramatic shift in consumer spending, as Australians turn to BNPL rather than credit card.
Over a million Australians have canceled credit cards in the past year, in favor of new digital payment services offering interest-free installments, according to research by DBM Atlas and Nielsen.
Young consumers continue to embrace BNPL and drive future growth.
The survey of 93,000 respondents found that almost two-thirds of Australians who used buy now, pay later are between the ages of 18 and 44, although older generations are also increasing their use.
Students also represent 31% of BNPL clients according to the report.
DBM Consultants executive director Tony Williams said the pandemic had caused “seismic changes” in spending behavior across the country.
âBuying now, paying later are not new financial options for consumers, but their appeal to Australians has increased since they entered the market in 2015,â said Williams.
“This increase then increased dramatically when the effects of the pandemic kicked in, reinforced by the flexibility and convenience of interest-free payment plan options, a radically different alternative to traditional credit cards.”
The Reserve Bank of Australia reported in March 2020 that buy now, pay later, transaction values ââincreased by 55%.
In its national survey, Australian research consultancy DBM Atlas reported in June 2021 that around 14% of Australian adults had made a purchase using a buy now, pay later service in the past four weeks, up from 11. % one year earlier.
Source: Nielson and DBM Atlas
The report also said online connectivity and engagement were well above standards for much of 2020, and Nielsen expects the shift in spending habits to continue as consumers begin. to resume some or all of their pre-pandemic activities.
All the big banks as well as PayPal and MasterCard now offer their own BNPL option to customers, which reinforces the fact that all the big players see BNPL as a payment option of the future.
Image by Jens Lelie via Unsplash