Consumers turning to Buy Now Pay Later to manage their finances amidst soaring inflation, finds RFI Global


Millions of consumers globally are now choosing Buy Now Pay Later (BNPL) services as a more responsible way to manage the cost of their online and in-store purchases according to their own cash flow, compared to alternatives like credit cards.

A new report into the attitudes and use of BNPL credit across EuropeAsia Pacific and the US, The Global State of BNPL: How banks and providers can champion customer interest was released today by RFI Global, the only global data and insights consultancy exclusively for financial services. It finds that rather than leading people towards a dangerous spiral of debt, BNPL is helping them to better manage cash flow by offering short-term interest-and fee-free products, thereby avoiding revolving credit card debt and bank charges.

RFI Global’s BNPL Tracker surveys over 14,000 consumers across 11 countries in EuropeAsia Pacific and the US twice a year about their attitudes towards, and use of, financial payment services such as BNPL.

What appeals to shoppers most when they choose the BNPL option at checkout (across all markets surveyed) is: no interest charges (33%), convenience (33%), improved cash flow management so that they can pay other expenses (28% globally) and helping them to budget (31%).

Consumers surveyed by RFI Global display a level of aversion to debt and do not want to buy things they cannot afford, even ranking this as one of the key reasons why they do not use BNPL. Standard Chartered’s ‘Future Money” survey[1] found that since the pandemic, people around the world were most concerned with ‘Meeting their daily expenses’ (37%). Rising inflation will further increase the efforts people make to better manage their money.

“The majority of BNPL users are millennials who want to manage their money more efficiently and avoid debt,” said Kate Wilson, Global Head of Consumer Credit, Deposits and Payments at RFI Global. “Indeed, our research suggests that most BNPL users are averse to debt. They want to buy what they can afford and are aware of the dangers and cost of credit.

“BNPL’s simple credit model provides a convenient way for them to spread the cost of some purchases over several weeks or months in equal payments, assisting with budgeting without resorting to a loan, going overdrawn or putting the expense on credit cards. They can buy what they want, when they want, and take full advantage of promotions or sale items.”

Best interests at heart but trust still to be earned

Despite BNPL’s growth, consumers trust banks more than they do the pureplay BNPL providers such as Afterpay, Clearpay, Klarna and Affirm, the RFI Global report finds. Overall they feel that the fintechs have their best interests at heart and don’t associate them with having hidden fees and charges. Satisfaction scores tend to be high with these pureplay providers, which makes it extremely likely that they’ll use the services again.

In the UK for example, consumers surveyed feel that a BNPL service offered by a bank would be more secure (36%), more widely accepted (31%), and more reliable (31%). More than half (53%) of consumers would consider a BNPL service offered by a bank extremely appealing compared to 35% who rate a dedicated third party BNPL provider the same.

“The high degree of consumer trust in banks presents an opportunity for them to launch their own services,” suggests RFI’s Wilson. “Some banks are already dipping their toes in – such as Barclays through its partnership with Amazon – and many more are considering the launch of BNPL services. To compete, banks will need to leverage their trust advantage and improve upon the focus that the fintech providers place on providing a great customer experience. They will also need to remain competitive on price and other incentives. Banks have a limited window of opportunity to do this before fintech BNPL brands win customer trust and loyalty themselves.”

Barriers for banks

However, the report highlighted some barriers for banks to overcome. In particular, the perception that a bank-offered service would be more expensive (35%), more complicated to use (24%) and would offer fewer offers and promotions (23%).

There are also worries about credit score impact and hidden fees. In France for example, 45% of consumers are worried that simply using BNPL might impact their credit scores (compared to 4% in the UK and 5% in the USA). More than a third of French respondents (37%) don’t trust themselves to make regular scheduled payments (compared 5% in the UK and 9% in the US).

Other report highlights:

  • No-interest, no-fee and convenience have boosted BNPL uptake – In AustraliaCanada, Mainland China, Mexico and the UK, no-fee or interest is the leading reason for using BNPL. Whereas in FranceHong KongIndiaSingapore and the USA, it is convenience that drives usage. This payment experience and ease of checkout is important to encourage repeat usage.
  • Against a backdrop of soaring inflation, consumers likely to repeat use BNPL for bigger ticket items as well as household expenses – although online retail dominates BNPL purchases – particularly fashion where 1 in 5 online purchases in Australia were paid through BNPL last year – consumers are interested in using it for higher value items such as electrical goods, household appliances and furniture. Further, around a third of consumers in Australia and the UK have indicated they would use BNPL to pay for everyday expenses such as household bills (38% in Australia, 34% in the UK), groceries (37% in Australia, 29% in the UK) and petrol (27% in Australia and the UK).
  • Frequent users willing to pay a fee for excellent experience – frequent users of BNPL are finding so much value in using it as a payment option that 47% of BNPL users in the UK and 49% in Australia say they would still use the provider if fees were attached to it.
  • Try and buy – a third of consumers globally used BNPL because they wanted to ‘give it a try’. Trial is a strong driver of usage in more nascent BNPL markets where dedicated BNPL services have only recently emerged, in particular India (45%), Singapore (43%) and Hong Kong (40%).
  • Younger consumers turning to BNPL – There is a sharp distinction for BNPL usage among millennials (aged 26-41 years) and Gen Z (aged 18-24 years). In maturing markets consumers aged 25-34 years are proving to be early adopters, with India (74%) and the US leading the way (61%). In Mainland China and India, Gen Z have flocked to BNPL with 89% and 73% of consumers under 25, respectively, using the service. In Australia, over 60% of millennials have used BNPL. Meanwhile, in Hong Kong, the greatest uptake has been among consumers aged 45-54 years.
  • Asia’s baby boomers joining GenZ – Surprisingly, RFI Global research indicates that alongside Gen Z users, there is also high uptake among baby boomers across Asia who are keen to try the BNPL trend. 61% of people aged 55-64 years and 77% of people older than 65 years in Mainland China – where Ant Check Later and WeChat FenFu are the top 2 brands – compared to 63% (55-64 years) and 50% (65+ years) in India and 39% (55-64 years) and 22% (65+ years) in Singapore.
  • Online dominates but in-store use is growing – globally most people are using BNPL when shopping online, but there is growing in-store use, particularly in Mainland China (over 50%) and Australia where BNPL is accepted in most stores. Creating a better in-store experience and growing awareness of acceptance for in-store will be key to further uptake for offline purchases.

Inecobank has joined BNPL, the latest trend in worldwide shopping, and launched paylater as a service


Buy Now Pay Later (BNPL) is a modern payment option that has transformed shopping worldwide, recently growing trendy among the younger public in various countries and becoming the hottest niche in all of fintech. There are options all over the world – Klarna, Afterpay, Affirm, and, in Armenia – paylaterInecobank, the Armenian leader in digital solutions in the banking sector, consistently introducing innovative financial technologies in the market, has joined the worldwide practice of BNPL (buy now, pay later) with a new service called paylater.

“Enjoy the moment, your payment can wait” is the motto of the newly launched paylater service which strives to improve customers’ experience by making purchases and payments more comfortable, and filling life with pleasant moments. From now on, Inecobank customers have more flexibility when it comes to managing their finances, allowing them to control their resources effectively and shop freely without any wasted effort or time.

Paylater provides users with a payment limit through the Bank’s top-rated InecoMobile application, allowing them to make purchases now and pay for them within 3 or 6 months at no additional fee. Payments are made with a QR code – just one click, with no need for any paperwork. Customers can shop at Inecobank’s partner stores and service providers, with offers ranging from tourism to aesthetic medicine and education, from clothing and accessories to car maintenance.

“Today Armenia has a great potential to occupy its unique place in the international financial industry. The proof of this is that worldwide fintech innovations are actively localized here as well. We are excited to bring global financial trends and the best international experience to Armenia and make them available to Armenian customers,” said Aren Naltakyan, CEO of Inecobank.

This simple, fast, and contactless paylater solution provides customers with the freedom and flexibility to shop and helps businesses stay competitive by introducing a new culture of payment acceptance and bringing new customers their way.


Buy Now, Pay Later: Five Takeaways From The UK Market


Buy Now Pay Later (BNPL) has taken off in the UK market. Consumer expectations have shifted away from traditional lending and payment products toward low-cost or free services with convenient, intelligent digital experiences. The concept of BNPL has evolved into an embedded digital payment and lending product in high demand and well-liked by both consumers and merchants.

In Bain & Company’s new survey of more than 2,000 UK online shoppers, we found widespread usage of BNPL services reflecting long-term shifts in consumer behavior. From our customer survey analysis and data from BNPL companies, we estimate that approximately 10.1 million people used BNPL in the UK in 2020, with the number of users growing by 70-80% from the prior year.

The full report, Buy Now, Pay Later: Moving Center Stage with Consumers and Regulators, can be found here.

The five takeaways from the UK include:

  • There is a high demand for BNPL services which is spurring sustained growth as BNPL appeals to the mass consumer market
  • BNPL has a favorable consumer perception due to the simplicity of payment at checkout and the ability for users to manage their cash flow better
  • BNPL is a key ingredient of merchants’ growth plan as consumers like the convenience
  • The digital upheaval in financial services continues as consumer expectations shift from traditional lending and products towards low-cost or free services with convenient, intelligent digital experiences
  • Merchants should keep ahead of imminent regulation and the need for industry-wide debt data to ensure adequate consumer protection as usage grows

Among the other findings of our BNPL research and consumer survey:

  • BNPL transaction value in the UK reached £6.4 billion in 2020, having grown by 60-70% from the previous year. We expect this growth trajectory to persist, as BNPL appeals to a mass consumer market and is expanding to be used across a wider range of products and use cases
  • 49% of online shoppers aged 25-34 surveyed in the UK reported using BNPL and 51% used credit cards; the generational shift toward BNPL is even more pronounced among younger cohorts. Among respondents aged 18–24, more used BNPL (42%) than credit cards (31%)
  • BNPL had a Net Promoter Score℠ of 30 for consumers compared with 6 for credit cards and –15 for overdrafts. Consumers are attracted to the interest-free nature of BNPL as well as the simplicity of payment at checkout and the ability to manage their cash flow better by deferring payments
  • Over the course of 2020, we estimate that BNPL users in the UK saved £103 million in credit card interest costs
  • 57% of merchants using BNPL in the UK reported an increase in basket conversion, and 46% experienced an increase in average order value. Compared to card payments, orders through BNPL can be 20%-30% larger as consumers spread out the payments and like the convenience
  • 54% of merchants in the UK reported having their brand exposed to new customers through co-marketing activities, and 23% could track the direct referral of customers from their BNPL providers
  • 76% of surveyed merchants in the UK said BNPL will be a key part of their growth plan over the next year

Roughly 20,000 merchants in the UK are now offering BNPL at checkout and the industry is set to face stricter regulation by the UK Financial Conduct Authority. Our analysis shows that the current credit referencing systems and processes are not designed for higher frequency, low-value credit checks and reporting for each transaction. Fears around the inadequate ability to share credit data between BNPL companies and other lenders will also need to be addressed.

More than two-thirds of 400 BNPL users surveyed under the age of 45 want their BNPL usage to contribute toward their credit score but BNPL providers still have the challenge of sharing credit data with each other. Bain research suggests three options to overcome this issue:

  1. Data-sharing mechanisms should become more inclusive of thin-file customers which includes those with a limited credit history
  2. Credit-scoring methods should adjust for the short-term, lower-value nature of BNPL balances, and
  3. Open banking regulations could enable BNPL companies to work with credit reference agencies and banks to help customers build their credit profiles.

“BNPL benefits both consumers and merchants and has a clear role to play in the UK financial services market,” said Jeff Tijssen, partner at Bain & Company and leader of the firm’s global fintech business. “Increased regulation will help protect consumers by creating standards for BNPL providers to follow. Yet just as important is the willingness of BNPL companies to actively put customers’ welfare and priorities front and center. Companies will thrive by combining the conveniences of new digital experiences with active measures to promote healthy financial management and debt repayment.”

“The success of the BNPL industry has been their ability to appeal to a mass-market audience across income and age groups,” said Ryan Garner, associate partner at Bain & Company and co-author of the report. “This is due to their marketing as well as their growing presence within e-commerce alongside popular retailers. We expect BNPL to become much more of an influencer of customer purchasing decisions as the industry looks for new growth opportunities beyond payments.”