BNPL users more likely to have missed payments

Conducted by regulator the Financial Conduct Authority (FCA) as part of its Financial Lives research, these individuals were also almost twice as likely as those who haven’t taken out a BNPL product to have increased the amount of debt on credit products over the last year and are more than twice as likely to have also used a high-cost credit product.  

In total, it found that 27% of UK adults – making up approximately 14 million people – have used a BNPL product at least once in the six months prior to January 2023. This is up from 17% who said they had used it in the preceding 12 months in May 2022.  

Commenting on this, FCA executive director of consumers and competition Sheldon Mills said: “Our research shows a significant increase in the use of BNPL over the past year. 

“When used appropriately, the product provides valuable benefits, but we want to ensure that consumers, particularly those in vulnerable circumstances, have adequate protections and are given sufficient information.” 

The FCA has also said – after voicing its concerns that their customers were at risk of harm because of how some of the contract terms were drafted – PayPal and QVC voluntarily made their continuous payment authority terms easier to understand. In addition to this, PayPal has made terms relating to what happens when a consumer cancels the purchase funded by the loan clearer and fairer.