The estimated £10 billion point of sale credit market is predicted to rise at over 15% p.a. with growth driven by younger consumers

 Analysis from global consulting partnership Kearney has found a growing appetite for point of sale (PoS) credit finance – otherwise known as ‘buy now, pay later’ –  among younger UK consumers, with over 60% (67%) of Millennials now using this service.

While 42% of Millennials have used a ‘buy now, pay later’ service more than once in recent years, they’re not the only shoppers using these services. A majority of consumers in Generation X (57%) have also used this type of at-checkout finance, with over a third (34%) having done so more than once.

The report, ‘Credit uncrunched: why banks and retailers must develop more PoS credit services’, revealed that while adoption is low overall  – 41% of UK shoppers have still never used these services – consumers would be more willing to use these credit options if they provide ease of use, value for money and transparency over any charges.

Point of sale credit finance has been used in different forms for a long time, but in recent years, this market has changed significantly with the introduction of new services including PayPal Credit, Klarna and Clearpay. As these services have become more available, consumers are becoming more open to this form of credit.

Nearly 60% (58%) of shoppers would use PoS credit for a purchase over £250, whether or not they could pay the full price up front – including 12% who would use the credit to trade-up and buy a more expensive product.

Over a quarter of shoppers (26%) would use ‘buy now, pay later’ options if they couldn’t afford their purchase immediately, including 13% who would rather do this than save up for the item(s) they wanted to buy.

The report also showed that consumers are increasingly using it as a way to choose which retailers to shop with. Nearly 40% of shoppers (37%) said that if making a purchase costing £250 or more, they would prefer to buy from a retailer that offered a ‘buy now, pay later’ option. This is especially true for younger shoppers – over half (51%) of Millennials and 42% of Generation Z agreed.

Sameer Pethe, Principal at Kearney comments: 

“The findings outlined in this report reveal the potential opportunities for a service provider to be able to develop and market a genuinely easy to use, transparent PoS credit service. Today, this is a very fragmented market: a good proposition linked to a trusted brand could capture a substantial market share.

 Retailers who understand their role in responsible lending can stand to benefit from offering ‘buy now, pay later’ credit services. For some consumers, access to PoS credit is now a reason to use a particular retailer – and this trend will become more significant as the market for these services continues to grow.”