Australia’s younger consumers are increasingly embracing buy now, pay later (BNPL), a new survey shows. More than 40% of shoppers between 18 and 39 use the installment payment offering, the Reserve Bank of Australia (RBA) said in a study released Sunday (Nov. 26). The study, which also noted a sharp rise in BNPL use overall, comes amid a […]
The post Australia’s BNPL Use Surges Among Younger Consumers first appeared on PYMNTS.com.
Australia’s younger consumers are increasingly embracing buy now, pay later (BNPL), a new survey shows.
More than 40% of shoppers between 18 and 39 use the installment payment offering, the Reserve Bank of Australia (RBA) said in a study released Sunday (Nov. 26).
The study, which also noted a sharp rise in BNPL use overall, comes amid a similar jump in use of the payment method among consumers in America.
The RBA found that nearly a third of Australians 18 and older had used in the 12 months prior to being surveyed, compared to about a quarter of consumers in 2019.
However, although a “large share of Australians had used BNPL in the past year, BNPL payments made up just 0.7 per cent of the number of payments in 2022 up from 0.5 per cent in 2019,” the central bank’s survey reported.
Younger consumers’ use of BNPL in Australia mirrors trends seen in the U.S. As noted here last week, 50% of American consumers ages 25 to 44 have used the payment method at least once.
“While some may use BNPL for luxury spending, many use it as a vital financial management tool,” PYMNTS wrote. “This includes spending on essentials such as groceries and to tide them over until they receive their next paycheck.”
For a number of U.S. consumers, BNPL has become a necessity, especially for younger shoppers struggling with credit card debt and high interest rates.
PYMNTS Intelligence research has found that 28% of millennial and Generation Z consumers would abandon a purchase if BNPL were not offered at checkout.
“This shift in consumer behavior is reshaping the retail payments landscape, with BNPL becoming a must-have for shoppers,” PYMNTS wrote.
Australia is the birthplace of a number of well-known BNPL providers, such as Afterpay and Sezzle. It also recently began regulating the industry as a credit product.
“BNPL looks like credit, it acts like credit, it carries the risks of credit,” Australia’s Assistant Treasurer and Minister for Financial Services Stephen Jones said in May.
Speaking at the Responsible Lending and Borrowing Summit, Jones pointed to a list of issues reported to the Australian Securities and Investments Commission (ASIC) that add up to “unacceptable levels of unaffordable lending occurring, largely concentrated amongst low-income borrowers.”
The post Australia’s BNPL Use Surges Among Younger Consumers first appeared on PYMNTS.com.
