The eye-opening stats behind booming buy now, pay later market
Buy now, pay later is on the rise in Australia with more consumers and retailers choosing to make the most of delayed payments.
The services made up less than one per cent of transactions but contributed a whopping $14.3 billion to Australian GDP in the last financial year.
Around half of the 2700 consumers surveyed said that using the services allowed them to feel in control of their spending.
“The research shows consumers are choosing buy now, pay later to help them budget and manage their money in the way they want,” Australian Finance Industry Association chief executive Diane Tate said.
There are almost six million accounts across a variety of platforms and users made an average of 16.6 transactions at an average value of $151 last year.
Buy now, pay later services also resulted in the creation or maintenance of more than 99,000 full-time jobs across the Australian economy.
In good news, less than one per cent of active accounts were subject to financial hardship arrangements, but the survey showed that more than 7 per cent of people cut back on essentials to make repayments.
Eighteen per cent of buy now, pay later users have missed a repayment compared with 17 per cent of credit card holders.
Reserve Bank data for the period March 2021 to March 2022 showed a 2 per cent decrease in the number of personal credit card accounts.
However, credit cards still account for about 19 per cent of transactions, totalling around $315b where debit cards accounted for more than half of transactions and a total of $428bn.
Buy now, pay later accounts for less than half a per cent of all transactions.
Retailers that accepted buy now, pay later payments increased their revenue by an average of $25,880, while small businesses made an extra $18,576 on average.
“Retailers are using (it) to help them grow their businesses and participate in the digital economy,” Ms Tate said.
Almost a quarter of retailers raised their prices as a consequence of accepting buy now, pay later services, though the majority have not changed their prices.
AFIA’s buy now, pay later code of practice requires signatories to undertake proportionate affordability checks, limit late fees and support their customers who may be experiencing financial difficulties.
Originally published as Australians spend big with buy now, pay later services
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