Surge in BNPL usage

The research surveyed 400 retail industry decision-makers, with those offering BNPL believing it would continue to rise – accounting for 22.1% of sales by the end of 2022. It currently stands at 18.7%.

It further found shoppers who use BNPL are paying an average of 4.8 purchases – almost double the 2.6 purchases in February 2022. The average BNPL user’s outstanding balance stands at £254.

Barclays and StepChange Debt Charity have said the news is “concerning” because almost a third of BNPL users have said the lending has resulted in problem debt.

Richard Lane, director of external affairs at StepChange, further commented on the use of BNPL for essential items, rather than luxury goods: “There is rising evidence that BNPL isn’t just being used to buy discretionary items like fashion, but also life’s essentials, like groceries.”

The multibillion-pound sector will be regulated by the Financial Conduct Authority (FCA), although new rules might not take effect until 2024.

Martin Lewis, founder of MoneySavingExpert.com, said: “The pace of progress is painfully slow.

“Buy now, pay later regulation is desperately needed, so my pleasure that it’s finally to happen is tempered by frustration at how long it is taking.”