INDUSTRY FOCUS
Christmas not on the cards this year
One in every two UK consumers is planning to ditch their credit card entirely for Christmas shopping this year, claims research from Buy Now Pay Later (BNPL) company Klarna.
Two-thirds of credit card owners want to avoid paying with credit card interest, according to the Swedish company’s research of over 1,000 UK consumers carried out by market research firm Nepa.
Klarna’s research said 46 per cent of Brits that used their credit cards ended up paying interest on their Christmas shopping last year.
The research, which also covered the financial habits of BNPL users versus credit card users, claimed 62 per cent of BNPL consumers have set an overall budget for their holiday shopping, compared with just 42 per cent of those who had never heard of BNPL.
Almost six-in-ten – 57 per cent - of BNPL consumers already know what they intend to buy during the Black Friday sales compared with only 34 per cent of those who don’t use BNPL according to the research.
The research also found that 51 per cent of BNPL consumers wait for Black Friday sales to make larger purchases compared to 23 per cent of people who have never heard of BNPL.
In addition, the research claimed 56 per cent of BNPL consumers research the best deals ahead of time compared with 30 per cent of those who don’t use BNPL. Despite regulatory scrutiny, the BNPL later industry has grown rapidly over the past year.
“This data shows that shoppers are increasingly smart and mindful about their buying decisions,” said Alex Marsh, head of Klarna UK.
“It’s no wonder they are abandoning high-cost credit cards that are designed to obscure spending to drive up debt and interest payments.”
He added: “Helping shoppers plan in advance and budget smartly is baked into BNPL, giving people better control over their finances to save money and keep them out of debt.”
