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COVID-19 Impact on Europe Buy Now Pay Later Industry and Trends 2021

In 2020, as a result of economic disruptions resulted by the COVID-19 health crisis, BNPL services gained special attention. In Europe, in the fourth quarter of 2020, the BNPL payment method was offered by one-fifth of European merchants, a number looks optimistic for the BNPL service providers when compared to the share of retailers accepting credit cards. The letter was more than twice as high, but credit cards have been present on the market for much longer. Moreover, in some countries, including Poland, the share of retailers offering installment and deferred payments was substantially above the average.

Moreover, from the consumers’ side, in Germany, about half of those who are aware of the BNPL option have already used it, and top expectation of German consumers from the BNPL services were “transparent conditions” and “no interest rate”. This rather high user penetration rate is no surprise, as payments via invoice have been on the German market for a long time, and the invoice payment method is still strongly preferred over installments. Furthermore, the situation looked similar in the neighboring countries: Austria and Switzerland, where invoice payments were among top three payment methods used for online shopping, and payments in installments closed the rankings. Meanwhile, in the UK, the majority of UK respondents in a November 2020 survey stated that when using BNPL services, they prefer installment payments, rather than paying the full amount later. Moreover, close to two-thirds of UK respondents admitted that BNPL services induced them spend more, and half of those using the service had missed at least one BNPL payment.

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