The report titled “United Kingdom Buy Now Pay Later Business and Investment Opportunities Databook – Q1 2024 Update” has been added to ResearchAndMarkets.com’s collection. It reveals that BNPL payments in the UK are expected to grow by 15.0% annually, reaching $34.28 billion in 2024.
The BNPL sector’s medium to long-term outlook remains positive, with an anticipated CAGR of 9.8% from 2024 to 2029. Gross merchandise value in the UK is projected to rise from $29.80 billion in 2023 to $54.62 billion by 2029.
Amid the cost-of-living crisis, increasing numbers of Britons are turning to BNPL schemes to manage their bills, a trend expected to continue. This growing demand is prompting providers to launch new products to drive revenue and growth.
However, the rise in BNPL adoption is also leading to an increase in debt traps. Young consumers, in particular, are vulnerable to missed repayments and late fees. Despite these challenges, the overall growth outlook for the BNPL industry in the UK remains positive for the next few years.
With inflation affecting consumer spending, many Brits are relying on BNPL solutions for purchases. A Citizens Advice report indicates that 11% of consumers have used BNPL for groceries, with 35% among frequent users. The Financial Conduct Authority reports that nearly 14 million Brits were using BNPL schemes as of January 2023.
The report expects this trend to persist in 2024, with BNPL schemes driving growth in gross merchandise value and volume. However, this also leads to higher delinquency rates, with many users struggling to make timely repayments. About a quarter of BNPL users faced late fees in the six months leading to December 2023, particularly among younger consumers (34% of those aged 18-34).
To capitalize on the growing BNPL market, firms are expanding their partnerships and launching new products. For example, Klarna has partnered with Airbnb, allowing UK travelers to pay for stays over time. Initially launched in the US, this payment option is now available in the UK for reservations between £35 and £4,000. Klarna plans to introduce this product to other European markets as well.
