City AM – Buy now pay later boom
Exclusive: Brits turn to buy-now pay-later to fund spending amid cost of living crisis
City AM says Brits are turning to buy-now pay-later products to fund online spending amid a cost of living squeeze that is eroding their disposable income rapidly, exclusive research shared with City A.M. reveals.
Nearly £1 in every £8 spent online last month was sourced from buy-now pay-later providers, according to research by Adobe Analytics.
The proportion is up slightly from just over 10 per cent in the same month last year, signalling shoppers are responding to their spending power being eaten up by inflation by using firms like Klarna and Zilch to keep splashing the cash.
Buy-now pay-later (BNPL) is a type of interest-free credit that allows customers to buy products by borrowing against their future income. Like credit cards, however, there is a risk people can get tangled up in serious debt trouble if they fail to repay their debts.
Adobe attributed the rise in demand for BNPL services to Brits trying to “spread the cost of January purchases to ease the financial pressure caused by continued high levels of inflation and the cost-of-living crisis”.
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