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BNPL expected to double market share in UK e-commerce within the next four years

BNPL expected to double market share in UK e-commerce within the next four years

Buy now, pay later schemes are expected to account for 10 percent of all UK e-commerce sales by 2024, according to data compiled by Worldpay.

The UK’s e-commerce market, currently the third largest in the world, is predicted to be worth £264 billion by 2024, a 37% increase on 2020. This follows a 13% growth from 2019 to 2020, as total spending hit £192 billion.

The 2021 edition of The Global Payments Report by Worldpay - which surveyed 46,000 consumers globally - highlights the impact of the pandemic on UK e-commerce and the resulting shift in consumer payment preferences, with analysis showing it will lead to the rapid growth of the market over the next thre years. The data predicts that by 2024 over 20% of all purchases in the UK will be made online.

For the second year running the report found that BNPL services were the fastest-growing online payment method in the UK, a trend that is expected to continue for the next four years, despite the threat of regulatory intervnetion by the Financial Conduct Authority.

The data indicates that BNPL transactions in the UK will grow 29% year-on-year with this payment method being on course to double market share to 10% by 2024. The analysis shows that overall BNPL spending in the UK will rise from £9.6 billion in 2020 to £26.4 billion in 2024.

Pete Wickes, Worldpay general manager Emea, comments: “We predict that the BNPL sector will not slow down - with the UK market seeing double digit expansion over the next few years. As this happens, it’s important that the frameworks that govern and protect consumers and merchants also adapt to ensure that there continues to be trust and reliability in payments technology.”

Comments: (1)

A Finextra member
A Finextra member 24 February, 2021, 12:393 likes 3 likes

BNPL is not a payment method, it is a consumer credit activity to help merchants to "move merchandise". The key issue is smooth credit approval for almost all shoppers in order for merchants to be interested. The process seems to be "easier" for shoppers than a "real" payment. If one intends to pay in full ASAP one spends more time /effort on the "credit application + later payment in full" compared to a payment in full in connection to the shopping. But it seems easy. And it tempts us to buy stuff one does not have funds  for on the bank account or available on a credit card limit. The BNPL business models many times contain additional "invoicing" fees", e-mail invoices the buyer needs to be observant on, strange due dates + high reminder fees and of course a reasonably high APR for postponing the payment making the average payment more expensive. In countries like Sweden there is new legislation in place prohibiting e-comm merchants to offer BNPL or any other credit service as the first or default choice. Instead merchants must as first/default payment offer means for people to pay with their existing funds. This due to rapid growth in credit loss for BNPL with associated adverse impact on inbedted shoppers.