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Quick summary
- 2 in 5 Australians (43%) have used a buy now pay later (BNPL) service in the past 6 months (May 2023 data).
- BNPL adoption hit an all-time high in July 2022 (49%) and has dropped back down to usual levels since then.
- BNPL usage has grown most rapidly among gen Z with 64% having used a BNPL service in a 6-month period in January 2023, compared to 37% in January 2020.
- The number of Australians paying BNPL late fees has increased significantly since January 2020 when just 5% had paid a late fee in the last 12 months compared to 10% in January 2023.
How many Australians use BNPL?
- 43% of Australians said they’d used a BNPL service in the last 6 months (May 2023).
- In 2020, close to a third (32–36%) of Australians had used a BNPL service in the last 6 months. However in 2021, adoption increased to 2 in 5 and has generally remained above 40%.
- BNPL adoption hit an all-time high in July 2022, with nearly half of Australian adults (49%) saying they had used BNPL in the last 6 months. Since then, BNPL adoption has been trending down.
- BNPL usage has grown most rapidly among gen Z. In January 2020, 37% of gen Z had used a BNPL service in a 6-month period, compared to 64% in January 2023. BNPL adoption among young Australian adults peaked in July 2022, with 4 in 5 (70%) of gen Z saying they had used BNPL at least once.
- Adoption among gen Y peaked at the same time, with over two-thirds (69%) of the demographic having used a BNPL service in a 6-month time period. However, since then BNPL usage among gen Y has trended down quarter on quarter.
- Gen X are now more likely to be using a BNPL service than they were in January 2020 when just over a quarter (27%) said they’d used BNPL in the last 6 months. As of January 2023, a third (33%) of adults in this generation admitted to using BNPL in the last 6 months.
- BNPL use among baby boomers is at an all-time high as of April 2023, with 15% saying they’ve used a BNPL provider in the last 6 months. However, usage among the older population is still well below the other generations.
- The number of times the average Australian used a BNPL service in a 6-month period has trended up since 2020. For the majority of 2020, the average figure was below 2 but hit a high of 3.2 in the first half of 2021. In 2023, the average usage has remained between 2.2 and 2.4 times over a 6-month period.
How much are Australians paying in BNPL late fees?
- The number of Australians paying BNPL late fees has increased significantly since 2020. In 2020, around 5% of Aussies said they’d paid a BNPL late fee in the last 12 months. This increased to an average of 8% in 2021 and 9% in 2022. As of January 2023 around 1 in 10 Australians (10%) said they’d paid a BNPL late fee in the last 12 months.
- However, while the number of Australians paying a BNPL late fee has increased, the good news is that the dollar amount paid has trended down year on year. In 2020, Aussies were forfeiting an average of $94 in BNPL late fees. This dropped to $89 in 2021 and $63 in 2022. As of January 2023, the average amount paid in BNPL fees was $50.
- 4% of Australians said their BNPL balance was 1 of the top 3 bills that caused them the most stress from January–May 2023.
What is the average BNPL balance carried by Australians?
- While BNPL usage has trended upwards the average balance carried by BNPL users remains below 2021 levels and well below the peak of $1,776 it reached in January 2022.
- Currently, those with a BNPL balance have an average debt of around $1,200.
Why Australians do and don’t use BNPL services
- Finder data from 2021 reveals that 2 in 5 Australians (40%) prefer to use cash, a debit card or credit card over BNPL services.
- The most common concern of using BNPL services is the effect on credit scores (6%) due to not meeting repayment terms, followed by late fees (4%) and the ability to take out a home loan (3%).
- A separate Finder survey found Afterpay is by far the most popular service, with 38% of respondents having used it. This was followed by Zip (24%), store lay-by (8%), Humm (8%) and Openpay (7%).
- The top reasons shoppers opt for BNPL over credit cards are ease of sign-up (51%) and not having to pay interest (51%).
- 1 in 3 (33%) say they prefer BNPL because they are worried they would get into debt by using a credit card.
- A further 23% say they use BNPL simply because they are used to it, while 21% say it’s because they were rejected for a credit card.
