Buy Now Pay Later (BNPL) payments have surged in recent years, with Gen Z playing an instrumental role in driving the service.
In the past year, 42% of UK shoppers aged 16 to 24 used a BNPL service to help spread the cost of big-budget fashion items and expensive tech purchases, according to a new report by Student Beans.
“With services such as Klarna already dominating the after-pay sector and digital bank Monzo recently introducing its Pay Later scheme for purchases up to £3,000, BNPL services used by Gen Z Brits will continue to grow in popularity,” the student loyalty network said.
In addition, 37% of Gen Z consumers feel that payback services are “great” as they help people afford the items they want to buy most. However, their parents disagree, with 65% saying they encourage young people to spend more than they can afford. Grandparents are even more unfavourable, with 75% expressing the same opinion.
The research also revealed that 57% of Gen Z shoppers used BNPL services to refresh their wardrobe, with tech accounting for 47% of purchases, followed by health and beauty at 27%. Conversely, Gen X are more likely to use BNPL for technology, while Boomers use it to spruce up their homes.
“Buy Now, Pay Later services have taken the eCommerce world by storm and our research shows that 42% of Gen Zs have used one before,” said Student Beans b2b editor Becky Kells.
“While paying in instalments is nothing new, the spending categories preferred by Gen Z consumers certainly are. Compared to Gen X and Boomers, Gen Zs are significantly more likely to use Buy Now, Pay Later services for fashion, health and beauty.”
Kells also noted that Gen Zs aren’t using Buy Now Pay Later services naively, pointing out that 53% believe they’re risky, while just under half have returned BNPL purchases before being charged.
“This showcases Gen Zs’ financial savviness – they know their way around eCommerce by now and will only adopt services that work for them.”