Why do Aussies use Buy Now Pay Later? Data shows that convenience is the number one reason

woman sitting on couch online shopping with BNPL out of convenience

Aussies are big Buy Now Pay Later (BNPL) users, leading the world in BNPL purchasing. But why? Sure, these services allow you to spread the cost of a purchase over a series of interest-free payments, but is that the real reason?

Mozo research shows that 82% of Aussie Buy Now Pay Later users turn to the platforms when shopping online due to ease, not necessity. Those surveyed reported finding it more convenient to log in to their BNPL account than to enter credit or debit card details.

  • 44% of BNPL users like the ability to enter their login details and not be slowed down by other check methods when shopping online.
  • One quarter of BNPL shoppers admit they often don’t have their card details available when shopping online, so they opt for the payment platform login.

People are using these split payment systems to streamline their online shopping checkout process further. However, this convenience could come at a cost if you don’t manage your repayment schedule and incur late fees.

While buying items online can be secure, there are still scams and phishing sites trying to obtain credit card information.

  • 13% of respondents favoured logging into their BNPL platform to avoid entering credit card details while shopping online.

How much are we spending on BNPL?

Just how much are we shelling out through these platforms? Mozo data shows that on average each BNPL-utilising Aussie is spending $2,208 annually on BNPL platforms, which breaks down to $184 per month.

And in contrast to popular belief, it is not the youngest generation of Aussie shoppers doing the majority of spending.

  • Those aged between 35-44 years spend $214, whereas those 18-24 years only spend $160 on average per month.
  • Gen X spends 25% more on average than Gen Z.
amount spend by Australians on BNPL broken down by age

The amount of BNPL accounts held is also a crucial factor when it comes to BNPL spending. Mozo found that people with more accounts spent more per month than people with just one BNPL account, which stands to reason.

  • Shoppers with just one account spent $145 on average a month, while those with three accounts spent $234 on average - $50 higher than the Australian average.
average monthly spend on BNPL by amount of accounts

What are Australians buying with BNPL?

When it comes to what people are purchasing with BNPL platforms, clothing (28%) is still the most popular category, then followed by electronics (16%) and homewares (9%).

graph of what people are buying with BNPL

Although fewer than the number of people in headline categories, a portion of the population uses BNPL to pay for more critical services, like bills or utilities (6%) and medical expenses (3%).

Many BNPL platforms now offer the ability to use their payment service at any retailer or service provider. Some providers also offer one-off disposable digital cards that allow you to shop in-store or online with BNPL if that retailer doesn’t allow for BNPL payments.

When are Aussies choosing to use BNPL?

As Buy Now Pay Later grows in popularity and is available in more stores, some users are splitting payments everywhere they can. If you fall into this category, it’s important to keep track of your spending and don’t miss repayments that can end up in late payment fees.

  • 20% of users prefer split payment platforms everywhere they can, as they like to use them as their primary payment platform.
  • In contrast, 17% of users only use BNPL when they don’t have enough money left after payday.
  • 40% of BNPL shoppers turn to the service when they are buying a ‘fun purchase’ or when buying expensive items to make them more affordable.

Interestingly, there are times when BNPL customers turn away from the platforms, suggesting that many do not always view them as the most financially responsible payment options.

  • 33% do not use their BNPL platforms when they have multiple items on their account already, opting for a different payment method.
  • 47% responded that they will not use BNPL if they can afford to purchase the item outright.
  • While 34% skip BNPL if they have just been paid.

Want to know more about your BNPL options? Go check out the full 2022 Mozo Experts Choice Buy Now Pay Later Awards winner list. Otherwise, head over to our Buy Now Pay Later hub to learn more about BNPL.