Hold onto your wallets, because ‘buy now pay later’ (BNPL) services are taking Australia by storm! It’s the ultimate shopping convenience, allowing us to indulge in our retail desires without breaking the bank… or so we think. Did you know that these nifty platforms experienced a whopping 4.5% revenue boost in FY22-23 alone? With over 158,000 Aussie businesses jumping on the BNPL bandwagon, it’s no wonder that a whopping 59% of us have given it a whirl. But here’s the kicker: a whole bunch of us are clueless about the hidden dangers lurking in the shadows of BNPL.
The Illusion of Safety
Picture this: nearly half of Aussies (47% to be exact) think that BNPL providers have to play by the same rules as those big, ol’ banks. Well, turns out that’s about as accurate as thinking you’ll stumble upon a pot of gold at the end of a rainbow. 38% of respondents incorrectly believe that missing a BNPL payment will not have any adverse effects on their credit score. The reality, however, is that BNPL services do possess the authority to report repeated missed payments to credit reporting bureaus, potentially damaging one’s creditworthiness.
Dishing the Scoop: Money.com.au’s Survey Shenanigans:
These insights were derived from a comprehensive survey conducted by Money.com.au, a leading finance platform committed to providing innovative solutions for consumer and business loans. The survey engaged 1005 Australians from various backgrounds, unveiling intriguing trends and perceptions surrounding BNPL usage.
Youthful Enthusiasm: The Driving Force behind BNPL Adoption:
Here’s a not-so-surprising revelation: young Aussies are going crazy for BNPL. Among 18-to-30-year-olds, a staggering 77% admitted to utilizing at least one BNPL provider for their purchases, surpassing their older counterparts. Comparatively, 69% of 31-to-50-year-olds and 39% of individuals over 50 reported having experimented with BNPL services.
BNPL Nation: Where Do We Stand?
Guess what? The BNPL obsession isn’t limited to just one state. It’s spreading like wildfire across the whole country! Western Australia and New South Wales are tied for the top spot, with a jaw-dropping 61% of their residents admitting to hopping on the BNPL train. But they’re not alone in this wild ride—56% of Victorians and Queenslanders, as well as 55% of South Australians, are proudly rocking their BNPL splurges too.
The Generation Gap: Younger Users Unaware of Consequences:
While the younger generation is more inclined to embrace BNPL credit lines, but, here’s the twist: they’re also the ones most in the dark about the consequences. Within the 18–30 age group, a staggering 28% do not consider BNPL as a form of credit. Additionally, a significant proportion incorrectly believes that untimely payments will not incur charges (12%) and that missing payments will not impact their credit score (44%).
The ‘buy now pay later’ phenomenon has taken Australia by storm, captivating consumers with its convenience and flexibility. However, as the survey reveals, a significant portion of Australians remains unaware of the potential risks involved. But don’t let your guard down just yet. Educate yourself about the potential risks and pitfalls lurking in the BNPL landscape. By understanding the intricate details and exercising caution, Australians can navigate the BNPL landscape wisely, ensuring a secure financial future.
