State of Credit research from Marqeta, the global modern card issuing platform, reveals that 15% of UK consumers surveyed will use Buy Now, Pay Later (BNPL) this Christmas, aligning with a growing trend towards online shopping where digital and flexible payment options are more readily accessible. The annual research, which follows a survey of more than 1,000 consumers across the United Kingdom, shows the proportion of UK consumers planning to do their holiday shopping in stores has more than halved in a year, dropping from 50% in 2023 to 24% in 2024.

The British public are showing a preference for flexible payments for holiday shopping, with nearly half (47%) of respondents confirming that they will use digital wallets to pay for most of their holiday shopping this year.   

Smarter Borrowing: Britons Prioritise Strategic Use of BNPL

Consumers reported being in a better financial position than this time last year, and 51% confirmed they have been able to save more money leading up to the holidays compared to 2023. 

Over a third (36%) of consumers confirmed they will still use credit options, such as BNPL, for their holiday shopping in 2024, but respondents reported a shift in how instalment payment programs were being used. Last year, 15% of users reported relying on BNPL because they had no other access to credit, this figure has almost halved to 8% in 2024. Short term credit users are now reporting being driven by reasons such as better budget management (44%), convenience (43%), and the flexibility of payment schedules (37%). 

Interestingly, 62% indicated that they would often proceed with their purchase even if BNPL was not available, highlighting its role as a financial enhancer rather than a necessity.

“In many ways, 2024 has been a year of transformation for BNPL, evolving from an alternative payment option to a staple in everyday shopping,” said Marcin Glogowski, SVP, Managing Director Europe and UK CEO at Marqeta.  “The substantial uptake in BNPL services this holiday season reflects a broader movement towards new, innovative payment solutions that offer greater flexibility. This is not just about spreading costs; it's about British consumers taking charge of their financial well-being and making informed choices that align with their changing economic circumstances."

Flexible Finance: Evolution of BNPL

There is also growing demand for innovation in financial services, with 44% of UK respondents stating that they are interested in using a payment card that can switch between debit, credit and BNPL features.

Marqeta recently announced Marqeta Flex, an industry-leading BNPL solution that will revolutionise the way BNPL payment options can be delivered inside payment apps and wallets, surfacing them at the moment of need within an existing payment flow. 

Marqeta Flex is being developed with leading payment providers Klarna and Affirm and payments platform Branch. Branch, a key innovation partner, plans to integrate the solution into its payments app for W-2 and 1099 workers, enabling their end users to easily access BNPL loan options catered to their individual needs.

“Marqeta has powered the growth of several of the leading BNPL solutions over the past decade, and we’re looking forward to making it even easier for consumers to access BNPL options seamlessly across a wider variety of payment experiences,” said Marcin Glogowski, SVP, Managing Director Europe and UK CEO at Marqeta.