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

The 2020 surveys show that during the pandemic, the majority of BNPL users worldwide were millennials (ages 20 to 40) and Gen Z (15 to 20), who are also the main target group of the BNPL service providers, such as Klarna, Afterpay, and Affirm. Nevertheless, in the USA, compared to June 2020, in March 2021, consumers from the 54+ age group were those who mostly increased the usage of the services, by almost doubling it. Furthermore, the main product categories that US consumers purchased with BNPL appeared to be electronics and beauty and health products. Additionally, in the UK, more than seven in 10 of respondents in the November 2020 survey stated that when using these services, they prefer instalments payments, rather than paying full amount later. In the same country, the average customer debt was in the range of EUR 120 and EUR 270, depending on the service provider and age group. In Germany, furthermore, in 2020, the top requirement that consumers put on the BNPL service provides were transparent conditions and zero interest rate.

Nevertheless, despite the accelerated demand, the BNPL services do have some clear downsides for the consumers, as alone in the USA, a significant share of BNPL users have already missed at least one payment, while approximately two-thirds of users, at the moment of the first BNPL transaction, had their credit card utilized by more than 75%.