UK shoppers nearly twice as likely to use ‘buy now, pay later’ schemes than buy second hand

Payment

UK shoppers are nearly twice as likely to use a ‘buy now, pay later’ (BNPL) service than they are to buy fashion items second hand.

According to new research from Biggest Bargain Hunters, brits were 98 per cent more likely to purchase unsustainable fast fashion items online than buy pre-owned.

BNPL services like Klarna also saw nearly double the amount of search volumes as secondhand retail platforms.

Furthermore, UK online shoppers are reportedly 53 per cent more likely to search for clothes that cost less than £5 than for those priced £10 or more, regardless of where they purchase from.

It comes as BNPL schemes saw a massive spike in usage during lockdown, as many remained without employment or on furlough but continued to shop.

In September this year Swedish BNPL specialist Klarna was valued at $10.65 billion after its latest equity funding round.

The funding means Klarna is now the highest-valued private fintech in Europe, and the fourth highest worldwide.

READ MORE: Buy Now, Pay Later firms to face tougher advertising restrictions

Klarna has seen a surge in demand for retailers wishing to sign up to its scheme, adding more than 35,000 new retailers in the first half of 2020 to its network of now more than 200,000 retail partners.

However, BNPL schemes have also come under far greater scrutiny, and in December the Advertising Standards Authority (ASA) released tougher guidance on how “delayed payment” schemes advertise their financial services.

The ASA’s sister organisation, the Committee of Advertising Practice (CAP), is responsible for writing the Advertising Codes, which advertisers are obliged to follow.

The Committee said that although these schemes are not a new form of payment or credit, their accessibility and popularity with younger consumers means customers may be less aware that deferring payment using a BNPL scheme is a type of debt.

CAP said the new guidance is intended to prevent ads for these services from misleading consumers, with special attention paid to ensuring consumers understand that BNPL services are a form of credit.

Click here to sign up to Charged’s free daily email newsletter

Payment

RELATED POSTS

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

Menu

SUBSCRIBE TO OUR NEWSLETTER

Sign up to our daily newsletter to get all the latest retail tech news and insights direct to your inbox.

  • This field is for validation purposes and should be left unchanged.