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Buy Now Pay Later Usage In 2021: New Report Reveals New Zealand Outlook

News highlights:

  • Finder releases research report on Buy Now Pay Later usage in New Zealand
  • Nearly a third of Kiwis (31%) have used a BNPL service within the past three years
  • Over half of Gen Z (52%) and 44% of Millennials have used BNPL within the past three years

24 June 2021, New Zealand – Buy now pay later (BNPL) services have grown exponentially in recent years, with COVID-19 accelerating the rise of the digital marketplace, according to a new report by financial comparison site, Finder.

Finder’s new Buy Now Pay Later Report takes a deep dive into BNPL usage in New Zealand, including its popularity surge during the pandemic, impact on credit cards and regulatory concerns.

The report provides a detailed snapshot of the typical BNPL user and how they interact with the service and manage debt.

Below are some of the key findings from the report:

BNPL continues to rise in popularity

  • 31% of Kiwis have used a BNPL service within the past three years, with the average customer using BNPL around eight times in six months.
  • BNPL is the most popular with younger Kiwis – 52% of Gen Z and 44% of Millennials have used the service within the past three years, compared to just 10% of Baby Boomers.
  • According to NZ Post, BNPL transactions grew by 49% in the first quarter of 2021 compared to the same period in 2020.

Kevin McHugh, Finder’s New Zealand publisher says:

  • “BNPL launched here in 2016, but 2019 was the year that it really took off – the number of customers grew by 49% and total spending more than doubled.”
  • “BNPL services really tap into the human psyche. Paying for a product in small instalments makes users feel their purchases are cheaper than they really are.”
  • “Low-income or debt-ridden customers might prefer the stability of a late fee over an unpredictable interest charge."
  • “This payment structure makes it particularly appealing to younger people as well.”


The growth of online shopping fuelled the BNPL fire

  • Online spending hit $1.47 billion during Q1 2021. This is up 27% compared to the same time in 2020, and a 50% increase compared to Q1 2019.
  • Approximately 2.2 million Kiwis shopped online during the quarter, equivalent to more than half of the nation’s adult population.
  • According to NZ Post, BNPL transactions grew by 49% in Q1 2021 compared to the same period in 2020, and previous data estimated BNPL transactions accounted for 11% of all online shopping revenue.

Kevin McHugh, Finder’s New Zealand publisher says:

  • “COVID-19 accelerated our transition to online shopping, with Kiwis jumping online to purchase everything from groceries to pharmaceuticals.”
  • “This surge in demand for online channels enabled BNPL to really thrive last year – the service has proved it is pandemic-proof.”
  • “Although life is pretty much back to normal in New Zealand, Kiwis have been reluctant to give up their new shopping habits. BNPL is here to stay.”


BNPL linked to declining credit card usage, but shoppers underestimate late fees

  • While the BNPL sector thrived in 2020, credit card balances fell by 21% between February and April, with February 2021 balances 15% lower year-on-year.
  • Research from the Australian Securities and Investments Commission (ASIC) reveals that 21% of BNPL users incur late charges.
  • Finder analysis shows that the maximum late fees a customer could incur on a $100 purchase over an 8 week period is $50, whereas a credit card holder with a rate of 19.4% would pay $3 in comparison over the same period.

Kevin McHugh, Finder’s New Zealand publisher says:

  • “The rapid rise of BNPL, particularly among younger generations, has many people questioning whether the new digital payment platform will replace the traditional credit card.”
  • “Credit card providers are well aware of the threat that BNPL poses, and are increasingly upping their offers to entice customers.
  • “Although BNPL’s interest-free offer is tempting, millions of consumers are paying big bucks on late fees.
  • “In many cases, it’s cheaper to pay a small amount of interest each month, than it is to fall behind on your BNPL repayments – some shoppers are falling into this trap.”


Regulatory concerns that BNPL can make it easier to accrue debt

  • Around 17% of Kiwis are carrying debt through BNPL services, with the average outstanding balance sitting at $418.
  • Around 38% of the population are extremely or somewhat concerned with their current level of debt, but this figure jumps to 63% for those with BNPL debt.
  • ASIC data shows that 20% of BNPL users are reducing or cutting out essentials to meet their repayments, while 15% have even taken out another loan to cover their costs.

Kevin McHugh, Finder’s New Zealand publisher says:

  • “The accessibility and zero-interest allure of BNPL can make it easy to get into debt if you don't meet your repayments on time.
  • “BNPL providers are categorised differently to credit providers, so they don’t fall under the same regulations that protect borrowers.
  • “This means it can be easier for ‘bad’ borrowers to be approved for BNPL, increasing the likelihood that they’ll run into debt.”


Please see here for the full Finder Buy Now Pay Later Report , which details BNPL usage in New Zealand in 2021.

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