42% of customers who buy now pay later “money borrowed to make repayments”

According to Citizens Advice, more than two in five recent Buy Now and Pay Later (BNPL) customers ended up borrowing money to make their repayments.

People were asked how they paid off BNPL purchases in the last 12 months.

Some 42% had used some form of borrowing, such as a credit card, bank overdraft, borrowing from friends or family, personal loan, payday loan or guarantor loan.

In the 18 to 34 age group, just over half (51%) had taken out some form of borrowing.



It’s just relying on one debt to pay off another debt

Millie Harris, Debt Advisor

BNPL can be a way to spread the cost of purchases affordably, without having to pay interest.

But the convenience of these services has raised fears that people will be overburdened, with some having to turn to other fee-based borrowing methods to repay the money.

The UK government plans to change the law to bring some forms of unregulated BNPL products into the Financial Conduct Authority (FCA) regulations.

Klarna recently announced that it will report the use of BNPL products to UK credit reference agencies from June, to protect customers and provide the industry with greater visibility of BNPL use, helping to improve affordability assessments.

Opinium surveyed over 2,200 people across the UK in March who had used BNPL in the previous 12 months.

Millie Harris, debt adviser at Citizens Advice East Devon, said: “Most of the people I talk to who use buy now pay later are living off overdrafts and credit cards so use them for repayments.

“It’s just relying on one debt to pay off another.”



Buy now, pay later is part of the credit industry and urgently needs to be regulated as such

Dame Clare Moriarty, Advice to Citizens

Dame Clare Moriarty, chief executive of Citizens Advice, said: “Buyers are piling on more borrowing and getting into increasingly desperate situations from which it can seem impossible to escape.

“The spiral of debt from buy now and pay later to credit cards, loans and even payday lenders shows that this is not a risk-free alternative.

“Buy now, pay later is part of the credit industry and urgently needs to be regulated as such.”

A spokesperson for BNPL Clearpay said: “Globally, 90% of Clearpay transactions are made with a debit card and 95% of installments are paid on time, demonstrating that our customers are using their own money to pay their bills. purchases and that they understand how our refunds are set up.

“Clearpay has always been in favor of fit-for-purpose BNPL regulation that protects the consumer. We look forward to HM Treasury’s decision on this and will continue to work closely with regulators and industry. »

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