Under 40s make up over half of Buy Now Pay Later users in Australia, says RBA

young aussies talking about buy now pay later

View Mozo's latest Buy Now Pay Later statistics report.

Buy Now Pay Later (BNPL)
has taken the digital payments world by storm over the past few years. 

In fact, the Reserve Bank of Australia reported that the value of BNPL transactions grew by 55% in 2019/20 and had more than tripled since 2016/17. 

These stats came from the RBA’s ‘Developments in the Buy Now, Pay Later Market’ March 2021 bulletin, which weighed up company reports from four ASX-listed BNPL companies: Afterpay, Zip, FlexiGroup and Openpay. 

According to the data, by December 2020 Australia’s two largest BNPL providers, Afterpay (3.4) and Zip (2.5), had almost 6 million active accounts* between them. 

But who uses Buy Now Pay Later? 

Young Aussies - for the most part.  

The RBA’s numbers also revealed that of those users, 55% were under the age of 40. 

Why? Well, it could be linked to a growing number of young customers distancing themselves from interest accruing products like credit cards. 

In its 2020 ‘Global Gen Z Report: Financial Feels’, Afterpay found that the number of young Aussies that owned credit cards dropped from 58% in 2002 to 42% in 2019.    

Buy Now Pay Later v Credit Cards: what’s the difference? 

In a classic contest between the old and the new, there are a bunch of differences and similarities between BNPL and credit cards. 

Here’s a breakdown of some of the main features: 


Buy Now Pay LaterCredit Cards
Most BNPL providers don’t charge interest on the instalments customers make.Most credit cards come with an interest rate attached to it. Currently on the Mozo database the average credit card rate sits at 13.60%. 

Keep in mind, some credit cards come with interest-free days, usually around 44 or 55. This means that if you pay off your debt before the interest-free period is up each month, you won’t be charged any interest at all on those purchases.


Buy Now Pay LaterCredit Cards
To pay off your purchase with BNPL, generally you’ll be required to make four equal instalments. These payments are often fortnightly and if you miss them you may incur a late payment fee.When paying off your credit card debt,  you must pay your minimum repayment amount each month to avoid a late fee. However, pay down your entire balance in full each month so that you don’t also accrue interest on your balance.


Buy Now Pay LaterCredit Cards
There are a bunch of fees associated with BNPL, these include: 

Establishment fee:
one-off when you sign up. 

Monthly fee:
usually between $8 and $10. 

Service fee:
this may apply for larger transactions to cover the cost of setting it up.

Late payment fee:
each time you miss or are late on a repayment you could be charged this cost.
Credit cards can come with a handful of fees, these could be: 

Annual fee:
ranging from $0 to $209 according to the Mozo database. 

Late payment fee:
generally up to $30 when you miss your minimum repayment. 

Credit card surcharge:
sometimes charged by a retailer for using a credit card. 

International transaction fee:
often around 3% this can be charged when shopping at overseas stores.

Want to find out more about Buy Now Pay Later? Head over to our Buy Now Pay Later hub for all the latest info and news! Or, check out Mozo's Buy Now Pay Later statistics report.

*The term ‘active account’ refers to when a customer has made a purchase using their account in the last twelve months (up until December 2020).