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Buy Now...Pain Later?

23 April 2021

Buy Now...Pain Later? [ 4.3 mb]

We estimate that 14 million people in the UK have used a buy now pay later (BNPL) product in the last year.

BNPL is a financial product that lets people split or delay payments to make them more manageable in the short-term. Whilst this is helpful for some, as a credit product it is inherently risky. 

The customer journey should, therefore, be designed with care to protect people from harm. However, our research suggests the current customer journey lacks the information, affordability checks and care necessary to stop people falling into debt.

Our research finds that of people who've used BNPL in the last 12 months:

  • 26% have regretted using a BNPL product
  • 39% used it without realising
  • 42% didn't fully understand at least one part of what they were signing up for
  • 41% have struggled with making a repayment

Upcoming regulation of these products by the FCA must focus on 4 themes to address this: product design, information and understanding, affordability, and fair and consistent treatment of people in financial difficulty.