Buy now, eat later: Almost 3 million Australians prioritise BNPL over other expenses
Millions of Australians are increasingly placing buy now pay later (BNPL) payments before their monthly obligations, according to new research by Finder.
A Finder survey of 1,090 respondents revealed 2 in 5 (43%) Australians have used a BNPL account in the last 6 months.
Of those who do have an account, 1 in 3 (32%) – equivalent to 2.8 million people – have skipped another bill in order to meet their BNPL repayments.
Sarah Megginson, money expert at Finder, said many are too reliant on paying in instalments.
"The BNPL system has seen millions of people fear the thought of having to pay for things in one single transaction.
"Many are going into huge debt thinking they can afford to buy lavish items and pay it off later and get trapped in the cycle of spending money."
A shocking 14% have missed paying their energy bill to cover what they bought on BNPL.
The research shows 1 in 10 (9%) have disregarded paying for their personal loan to finance their shopping habit. The same amount (9%) have missed a mortgage repayment.
Some have gone as far as skipping a meal (11%) in order to meet their BNPL repayment on time.
Megginson said while paying in instalments is quite enticing, late fees and account fees can make it more expensive than a credit card.
Research from Curtin University found the fees for missing BNPL payments could equate to a 276.12% effective interest rate based on a $30 purchase and the maximum potential fees.
A separate Finder survey found 1 in 3 (33%) could not survive without their BNPL account.
That's 2.9 million users who admit they wouldn't cope financially without the help of the new payment plan.
Gen Z (22%) was twice as likely as gen X (11%) to admit they could not survive without BNPL. This was followed by gen Y (19%).
Megginson said new government regulation will see the BNPL system considered a credit product for the first time ever, which is a step in the right direction.
"People are forgoing essential items in order to meet their repayments on time and the domino effect this can have is unimaginable.
"The regulation will see lower fees and charges for those who get caught out with multiple transactions draining their account.
"It's important that people manage their BNPL spending without regulations.
"Having more than 3 purchases on the go at once can be stressful to keep up with, so aim for this as your limit."
Megginson said Aussies should try a delayed gratification shopping strategy where they set aside a purchase for 24 hours.
"BNPL enables impulse buying, so if you can hold off on clicking 'purchase', you may find it is enough of a dopamine hit just to 'add to cart' without actually committing to buy," Megginson said.
| Could you survive without your buy now pay later (BNPL) account? (e.g. Afterpay, Klarna) | |
|---|---|
| Yes | 67% |
| No | 33% |
| Source: Finder survey of 470 respondents with BNPL, June 2023 |
| Have you missed any of the following payments to pay your BNPL repayments? | |
|---|---|
| No, I have never missed any payments to pay my BNPL repayments | 68% |
| Energy bill | 14% |
| Skipped a meal | 11% |
| Personal loan | 9% |
| Mortgage | 9% |
| Car loan | 8% |
| Insurance | 6% |
| Kids' school fees | 3% |
| Source: Finder survey of 470 respondents with BNPL, June 2023. Respondents could select all that apply. |