NAB Consumer Insight Report: Buy Now Pay Later

We look at the rapid rise of Buy Now Pay Later (BNPL) sector.


The Buy Now Pay Later (BNPL) sector has grown rapidly in recent years. Nearly 1 in 5 (18%) Australians consumers were holders of BNPL debt in Q1 2021, making it the fourth most common type of debt held after credit cards (41%), home loans (34%) and personal loans (19%). BNPL debt was much more widespread among consumers under 50 with around 1 in 4 people aged 18-29 (26%) and 30-49 (24%) holding BNPL debt, compared to just 5% among over 65s.

On average Australians consumers hold 1.8 BNPL accounts. That said, around 1 in 2 (51%) have one account, 3 in 10 (31%) 2, and 12% hold 3 accounts. Around 1 in 20 Australians have 4 or more accounts. Importantly, holders of multiple BNPL accounts are more likely among lower income earners (those earning less than $35,000 p.a.).

BNPL is most likely to be used for the purchase of clothing (45% of all consumers) and major household items such as furniture and appliances (40%). Around 16% of Australians used BNPL for spending on their children, 14% on automotive, and 12% on food. Other common uses include beauty and hair (12%), travel and holidays (10%), entertainment such as movies, sporting events and concerts (10%), jewellery (10%), telecom related products or services such as phones and internet (10%), sports (7%) and pets or ‘other’ items (6%).

Overall, BNPL debt stress is relatively low, however some groups are much more concerned than others. Across types of debt, pay day loans cause the highest stress for their holders (65.8 pts out of a possible 100), followed by loans from family and friends (59.8 pts), personal loans (54.1 pts) and investment loans (51.1 pts). Despite being the most widely held type of debt, stress was lowest for credit card debt (42.9 pts), followed by BNPL (46.1 pts).

That said, young men in the 18-29 age group reported much higher levels of stress over BNPL debt (62.0 pts). Men in the 30-49 age group (53.9 pts) and women in the 18-29 group (48.4 pts) also reported above average levels of stress.

Comparatively low levels of BNPL debt stress likely reflects ‘moderate’ levels of difficulty reported in paying instalments on time. On average, consumers scored 33.6 pts (out of 100 where 100 equals extremely difficult). But men 18-29 (54.8 pts) and 30-49 (43.9 pts) experienced far more difficulty meeting their instalments on time. NAB’s survey also found that almost 4 in 10 (37%) consumers with BNPL loans had missed a payment. Young men were again over-represented with almost 6 in 10 (59%) having missed a payment. Over 4 in 10 men 30-49 (44%) and women 18-29 group (41%) also said they had missed a payment.

Get the full insights in the NAB Consumer Insight Report – Buy Now Pay Later (June 2021)