New research published by the Consumer Council reveals that By Now Pay Later (BNPL) is the second highest form of credit used in the past three years.

“Buy Now Pay Later is increasing in popularity in Northern Ireland” said Sean Breen, Director of Financial and Postal Services at the Consumer Council.  

“Our research shows that this is now the second most used form of credit in Northern Ireland. Whilst it offers benefits such as being able to spread the costs of purchases, it is important that consumers fully understand what BNPL is, and the terms and conditions that apply.”

Key research findings include: 

• Amongst users, the vast majority (92%) find BNPL useful, helping them to manage finances (78%), and buy things that they otherwise wouldn’t be able to (76%).
• Although the impact of BNPL was broadly positive, a tenth experienced a negative effect on their mental health as a result of BNPL usage, which was more likely amongst those who had previously experienced financial difficulty.
• Use of BNPL products is around one in five (18%), much lower than use of credit cards at the moment (58%) but still the second highest form of credit used in the last three years.
• The main reasons for BNPL purchases in the last year were for smaller household purchases (50%), Christmas and other occasions (30%) and larger household purchases (24%), with low numbers who have used it for ‘essential’ spending such as food (6%) or utility bills (2%).
• Half (48%) of BNPL users reported they were doing it more because of recent cost of living increases. 

“The convenience of BNPL must be balanced with caution,” said Sean.

“BNPL is not currently regulated by the Financial Conduct Authority, and purchases made using BNPL are not covered by Section 75 of the Consumer Credit Act, which means you don’t have the same level of consumer protection as you have when using the likes of a credit card.” 

What to be aware of when using Buy Now Pay Later

• Make sure you can keep up with the payment terms.  
• Not all Buy Now Pay Later providers are the same – Some retailers may only let you purchase from them using their agreed BNPL provider/s so be aware of who your BNPL provider is when making purchases and the terms and conditions they offer. 
• You may be approved for Buy Now Pay Later even if you can’t afford it. 
• Extra charges for late or missed payments - You may be charged a penalty fee if your payments are late or if you missed payment. 
• Buy Now Pay Later products are currently not regulated by the Financial Conduct Authority. This means that you won’t be able to make a complaint to the Financial Ombudsman about the Buy Now Pay Later provider if anything goes wrong. 
• Lack of consumer protection – If you purchase something using Buy Now Pay Later you may not be covered under Section 75 of the Consumer Credit Act.