Over a quarter of UK adults use buy now, pay later fintechs


Fintech-based credit services, known as buy now, pay later (BNPL), were used by over a quarter of adults in the UK in the second half of last year, according to Financial Conduct Authority (FCA) figures.

In its Financial Lives research, the FCA found that 27% of the UK’s adult population, some 14 million people, had used BNPL services from June 2022 until January 2023.

This represents a significant increase in the services, which offer consumers the opportunity to spread the payments on a wide range of purchases. In the 12 months prior to June 2022, FCA figures showed that 17% of UK adults had used BNPL services.

Increased take-up is being driven by the current cost-of-living crisis, with more and more people finding it difficult to make ends meet. The FCA found that some people facing financial challenges have used BNPL services more than 10 times during the research period.

According to recent research by Adobe Analytics, BNPL services accounted for 12% of the UK’s £8bn total online spending.

BNPL firms are unregulated, but such is their growing customer base, the Financial Conduct Authority (FCA) last year used its influence to secure changes to the contract terms of BNPL firms, including refunding some customers who were unfairly charged.

The FCA used the Consumer Rights Act to assess the firms amid fears there was a potential risk of harm to consumers because of the way some of the BNPL terms were drafted.

Consumer rights defender Which? had already called for stronger protection for consumers using BNPL products because fintech products accelerated and simplified its take-up.

Sheldon Mills, executive director of consumers and competition at the FCA, said: “When used appropriately, the product provides valuable benefits, but we want to ensure that consumers, particularly those in vulnerable circumstances, have adequate protections and are given sufficient information.”



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