BNPL 2.0: Uptake in POS Finance is Rising - But Can Credit Providers Meet New Expectations?

Lending
24.04.2023 04:05 pm

DivideBuy, the leading UK LendTech point of sale (POS) finance pioneer, has today released the results of a new consumer insights survey, showing that 38% of UK consumers will make more use of interest free credit options to manage their finances in the next 12 months.

The survey shows a profound shift in consumer thinking and ushers in the dawn of BNPL 2.0, with 86% of people concerned about the impact of inflation and the cost of living on their ability to purchase goods and services, while 45% of people expect to be spend less on non-essential items (particularly eating out, clothing and holidays) in the next 12 months.

DivideBuy’s acquisition by Zopa, announced in February 2023, will also help it to bring to life BNPL 2.0, an evolution of BNPL that delivers the easy, integrated product customers love whilst also addressing industry issues around affordability and responsible lending.

Economic conditions are reshaping consumer spending expectations, and attitudes towards POS finance are softening. The user demographic for consumer credit is changing, with uptake by more affluent buyers on the rise.

However, with this change comes clear expectations from consumers about what they look for in a POS finance offer:

48% of people surveyed say they only look for products that are interest free
31% of people say that the length of any interest free period was important to them
24% of people would be more likely to take out a finance agreement if they knew they were eligible up front

DivideBuy’s own stats reflect an evolving user base for credit. 45% of DivideBuy customers are over 40, while 38% of DivideBuy customers earn over £30k per annum. Consumer credit is still a must-have for many, but for a growing number of UK shoppers, the option to keep hold of their cash for longer is becoming a competitive incentive.

So what does this mean for POS finance providers and merchants? The numbers speak for themselves: customers expect a seamless UX, interest free options, flexible payments and zero late fees. The days of filling out long application forms, cumbersome checkout journeys and lagging wait times are over. And credit providers must work together with merchants to deliver for their customers, or risk being left behind.

Interest free POS finance is the fastest-growing payment method in the world today, accounting for 2.9% of global eCommerce transaction value in 2021 and projected to account for a 5.3% share of the market by 2025. With shifting attitudes broadening the appeal of POS finance to consumers across all income brackets, FCA-regulated DivideBuy is committed to bringing fair, ethical and transparent POS credit solutions to consumers and merchants across all sectors.

DivideBuy offers a fast 60-second application process, including an Eligiblity Checker for soft credit searches and instant lending decision so that customers can spread the cost of their purchases with no hidden charge. It Provides merchants with an eCommerce credit plugin that also integrates with shopping cart functionalities such as Shopify, Magento, WooCommerce and Craft Commerce. To date, DivideBuy partners with hundreds of UK merchants, including many outside of traditional retail segments, demonstrating the appeal of flexible, fair finance methods to a growing number of customers.