As the holiday season approaches, a noteworthy trend has emerged among UK shoppers who are increasingly turning to Buy Now, Pay Later (BNPL) services for their holiday shopping. According to Marqeta’s State of Credit research, which surveyed over 1,000 UK consumers, an impressive 15% of shoppers plan to use BNPL options for their Christmas purchases this year.
The research additionally highlighted a considerable shift towards online shopping, with only 24% of respondents intending to shop in physical stores in 2024, a significant decrease from the 50% who shopped in person in 2023. This shift underscores the rising preference for flexible payment methods, with 47% of respondents stating they will use digital wallets for most of their holiday shopping.
Furthermore, the findings reveal that consumers are in a better financial position than last year, with 51% having saved more money leading up to the holidays compared to 2023. Despite this improved financial stability, over a third (36%) of consumers still plan to use credit options like BNPL. However, the motivations behind BNPL usage have evolved.
Previously, 15% of users relied on BNPL due to a lack of access to other forms of credit, a figure that has dropped to 8% in 2024. Nowadays, users are driven by better budget management (44%), convenience (43%), and flexible payment schedules (37%). Interestingly, 62% of respondents mentioned they would continue with their purchase even if BNPL were unavailable, indicating that BNPL serves more as a financial enhancer rather than a necessity.
Marqeta’s SVP and Managing Director Europe and UK CEO, Marcin Glogowski, noted that 2024 has witnessed BNPL transition from an alternative option to a staple in everyday shopping. This reflects a broader shift towards innovative payment solutions that offer greater flexibility. This shift is part of a larger narrative of British consumers taking control of their financial well-being and making informed decisions aligned with their economic circumstances.
Additionally, there is a growing demand for innovation in financial services, with 44% of UK consumers expressing interest in using a payment card that switches between debit, credit, and BNPL features. In response, Marqeta has introduced Marqeta Flex, an advanced BNPL solution integrating with leading payment providers like Klarna and Affirm, and the payments platform Branch. This solution aims to deliver BNPL options within existing payment flows, thereby enhancing accessibility and user experience.
The research underscores a significant increase in the use of BNPL services for holiday shopping, a pronounced shift towards online purchasing, and an ongoing preference for flexible payment methods. Consumers, now in a better financial position, are using BNPL to manage budgets and payment schedules more effectively, rather than out of necessity. Innovations like Marqeta Flex exemplify the ongoing evolution and growing consumer demand for flexible financial solutions.