BNPL schemes boost consumer spending by 10%

The data indicates that these financial products significantly enhance the likelihood of consumers making purchases, with a nine percentage point increase in the probability of buying an item when a BNPL option is available.

The findings are the result of a study carried out by Dr Stijn Maesen, an assistant professor of marketing at Imperial College Business School, alongside Dionysius Ang, an associate professor of marketing at Leeds University Business School. 

The aim of their research was to scrutinise the influence of BNPL schemes on customer spending behaviour. The analysis incorporated weekly sales data from a major US retailer that implemented a BNPL scheme allowing customers to divide their payments into four separate instalments.

The research showed an encouraging trend for retailers, noting that the introduction of BNPL options led to an uptick in sales. 

Typically, customers who previously spent £100 were now averaging £110 in their purchases. Moreover, the positive financial impact of BNPL was not merely a fleeting phenomenon; the study indicated that participants continued to spend more throughout the analysis period.

However, the growth of BNPL schemes, which have seen user numbers soar to an estimated 380 million globally in 2024, comes with concerns. 

The study highlighted that customers who are already at risk of financial difficulties are also prone to increasing their expenditure through BNPL, potentially leading them to take on unsustainable levels of debt.

Dr Maesen commented on this risk, stating, "These schemes allow financially vulnerable customers to take on unsustainable levels of debt – and in response to these issues, new rules and regulations are on the horizon in the UK."

In parallel with the financial implications for consumers, businesses are evidently reaping the rewards of BNPL schemes, pointing towards a dual narrative assessing both the benefits and risks associated with this increasingly popular payment method.