Younger generations move from credit cards to BNPL

Around three in ten millennials (30%) and generation Z’ers (31%) (those born after 1996) who use buy now, pay later (BNPL) cited not wanting to take out or use a credit card as a factor in choosing these services according to new research by  finder.com

This figure drops to 23% for gen X’ers (born between 1965-80), however, it still represents a significant number of people who are shunning credit cards during the coronavirus pandemic.

The new research from comparison website finder.com found that 24% of consumers altered their use of BNPL services during lockdown, with a fifth (19%) claiming to have made use of these schemes more than usual during this period.

The shift in payment preferences also looks set to stay, with 8.6 million consumers (13%) planning to use BNPL services more in the future.

Unsurprisingly a high proportion of millennials (24%) said they expected to use BNPL more going forward, compared to just 6% of baby boomers (those born between 1946-1964).

Other reasons that people have used BNPL schemes is the ease and convenience that BNPL brings (44%) and the ability to pay in interest-free instalments (39%).

Amelia Glean, shopping writer at the comparison site, finder.com, said “In lockdown, many young people turned to BNPL, instead of credit cards, to afford the same lifestyle they were used to living pre-pandemic – Clearpay revealed that Nike Air Force 1 trainers (£85) were one of the most popular purchases using its service during this period.”

“In fact, our findings reveal that young consumers used BNPL more during lockdown than before, and a large number are keen to continue doing so. Credit card companies must adapt and think about how they can attract these shoppers – perhaps with newer features such as paying in instalments, and pushing added benefits like rewards programs.”

To see the research in full and the paper ‘Instant hit: The rise and rise of buy now, pay later’ click here.