Buy Now, Pay Later Firmly Established in the Consumer Wallet, With the Majority Spending Between £100 and £500 Annually Using These Services
With buy now, pay later data now appearing on consumer credit reports, its popularity has not wavered, as recent research from information and insights provider TransUnion confirms.
TransUnion – the first UK credit reference agency to accept buy now, pay later data into credit reports – has revealed that nearly four in 10 (38%) UK adults use these payment services when shopping online, which is consistent with the previous year.i
Andy Piggott, director of core credit at TransUnion in the UK, said: “This steady picture shows how established buy now, pay later has become as part of the consumer wallet when it comes to methods of payment. The key drivers are cited as the ability to spread the cost over a period of time and the appeal of interest-free payments. This mirrors what we saw in our previous research and points to the important role that these providers are playing in giving consumers an even greater range of choice in their financial decisions.
“Having started to introduce this data into consumer credit reports last year, we’re pleased to note consumer habits have not been impacted, as this is really beneficial for both lenders and consumers in helping to create an even more holistic view of an individual's financial circumstances.”
More than half (53%) of those that used buy now, pay later in the past 12 months spent a total of between £100 and £499 over the year. Clothes accounted for 53% of all buy now, pay later spend, followed by consumer tech (33%) and furniture and furnishing (27%), according to TransUnion’s latest Consumer Pulse study.
Buy now, pay later is also known as ‘deferred payment credit’ and TransUnion led the way in creating a new credit search type for these transactions, where consumers usually pay for goods with plans spanning between one week and three months.
Praneeth Meka, TransUnion’s director of data and analytics, explains: “TransUnion has a proven track record of delivering innovative solutions, so we’re proud to have been at the forefront of changes within buy now, pay later credit reporting. By conducting extensive industry analysis and working with leading buy now, pay later providers, we were able to identify the most appropriate way to incorporate the data, putting the consumer at the heart of these new developments, and this latest study attests to the success of our approach.”
TransUnion's TrueVision solution now incorporates over 130 new buy now, pay later data attributes, giving finance providers a robust view of a consumer’s financial position and helping them make informed credit decisions.
The information includes the number of buy now, pay later agreements consumers have open, as well as total balances, repayment history and searches.
With this data now becoming available in credit reports, consumers have a clearer view of their credit commitments and can potentially widen access to credit, as lenders can see how they are managing their buy now, pay later agreements and may take that into consideration for other finance applications.
Unless stated otherwise, all data is based on TransUnion’s Consumer Pulse Q1 2023 study, based on a survey of 992 UK adults conducted between 6-24 Februay 2023
i TransUnion’s Consumer Credit 2022 report, based on a consumer survey of 2,000 UK adults in January 2022