More Australians are informed about buy-now-pay-later (BNPL)services, such as Afterpay, Zip, Latitude Pay, Humm and Openpay, the latest Roy Morgan Digital Payments Report has found.
Around 15.3 million Australians are aware of the services with Afterpay a clear market leader with over 70% aware of its existence in the year to February 2021, up 36.2% since September 2018.
Main rival Zip is also making a significant impression with nearly 50% of Australians aware of it, an increase of 30.5% in the same period. The two main BNPL services have been joined by a host of second-tier fintech companies in the space including Humm, LatitudePay and Openpay and awareness of all three is growing too. In February 2021, 20.3% of Australians were aware of LatitudePay, and over 1-in-10 were knew of either Humm (11.5%) or Openpay (11.3%).
According to Roy Morgan CEO, Michele Levine, retail spending has proved to be a boon to BNPL services.
“When Covid hit Australia a year ago many predicted this would lead to an economic catastrophe. However, unprecedented stimulus payments from the government, including the $100 billion JobKeeper wage subsidy, supported the economy and led to a boom year for many larger retailers,” she said.
“Retail sales in Australia have increased an average 8.8% on a year-over-year basis since May 2020, according to ABS data, compared to a 2% average annual increase pre-pandemic.” The closure of the international border, as well as domestic state borders for much of the year, prevented spending on travel and tourism and led many to spend on ‘retail therapy’.
Women are key users of BNPL services and have adopted the new fintech digital payment services at almost twice the rate of men, and nearly a quarter of people aged 25-34 use the new services, a higher rate than any other age group.
However, there are key differences between the different providers as, although people aged 25-34 are the most likely to use market leaders Afterpay and Zip, the second-tier services provided by Humm, LatitudePay and Openpay are more likely to be used by an slightly older demographic, Levine said.
“There are significant differences between the types of customers the different BNPL services attract that are drawn out more fully in the Digital Payments Report. The report provides a detailed and in-depth understanding of Australians using not only BNPL services but also bill payment services, online payment platforms, contactless/cardless mobile payments and wearable payment devices.”