Aussies are buying now, paying later more than ever

Aussies are buying now, paying later more than ever

Until the pandemic hit, swarms of Aussies were being bitten by the Buy Now, Pay Later (BNPL) bug. They were itching for fabulous things and experiences, and you better believe they were scratching that itch. And even though a bigger, bad-er bug came along (of pandemic proportions), more and more Aussies were determined to enjoy the financial freedom of BNPL in every way they could. Because that’s the power of services like payo – it’s a refreshing way to pay that doesn’t rely on hefty interest rates and hidden fees.

Sounds good, hey? Let’s dive a little deeper.

 

What is BNPL?

In a nutshell, ‘Buy Now, Pay Later’ lets you indulge in more of the things you love (or need) when you want (or need) them. You simply foot a quarter of the bill at the time of purchase, and pay the rest off in four interest-free instalments. For many, it’s a way of regulating your personal cash flow in the weeks spent waiting for your next monthly paycheck, and for others it just ensures you always have enough ‘emergency’ money on hand for, well, emergencies.

 

The rise of BNPL in retail

Unsurprisingly, the ‘Buy Now, Pay Later’ concept has enjoyed a huge rise in popularity since it first hit Australian shores. While it originally reared its beautiful head in the early 2010s, it has steadily become the purchase preference of choice since 2018.

According to recent survey results, almost half of Australians who shop online (45%) have used BNPL, and over half of those BNPL users (51%) have two or more BNPL accounts. More impressively, in the twelve months to June 2020, BNPL transactions Down Under rose by a whopping 43%. That’s a helluva lot of Aussies putting their money in the helpful hands of BNPL.

Buy now, pay later, huh? What’s the big deal?

We’re glad you asked. What’s got Aussies singing BNPL’s praises from the rooftops is the flexibility. Where credit cards and payday loans lock you into unfathomable interest rates, BNPL doesn’t have any. Zero. Nil. None. Zilch.

What this does is give you a sense of guilt-free freedom. Where you would otherwise be shackled to sneaky hidden rates that quickly snowball your debt, you instead know exactly what’s due and when it will be paid off. And unlike most BNPL services, with payo it’s just two monthly repayments. Not per purchase, but according to your total amount spent.

 

The downfall of credit cards

However, not everyone’s enjoying their moment in the sun. In fact, the success of BNPL has been a royal kick in the guts for credit cards whose total debt accruing interest stood at just $17.68 billion as at September 2021 – its lowest levels since November 2003, and a far cry from its peak of $32 billion in 2018. In fact, more than half a million Aussies cancelled their credit cards in 2021 in favour of more appealing options (like, you guessed it – BNPL).

 

Meet BNPL’s main users

Wondering who exactly is ditching credit cards for greater financial flexibility? New data from Nielsen shows that almost two-thirds of Aussies who’ve used BNPL are aged 18 to 44, with Gen Z women leading the pack with purchases of clothing ­– one of the most popular categories for BNPL shoppers. So, generally speaking, it’s the young’uns. The spring chickens who get their kicks enjoying all the goodness life has to offer. And who can blame them?

In fact, consideration of BNPL between Gen Z-ers has risen 15% compared to last year. Now, a whopping 79% of them would consider using it. So, as young people continue to represent the greatest portion of the Australian population, it’s not looking good for the humble credit card. (We almost feel sorry for them.)

 

Payo is bringing BNPL to the hospitality biz

The retail biz is buy now, pay later’s biggest fan, with the bulk of purchases currently on things like household appliances, furniture, clothing and accessories. However, 28% of purchases are already on essentials, such as food, which is up a huge 11% from 2019. And with BNPL adoption set to grow by 24% by 2028, there’s little doubt that buying now and paying later is going to a regular fixture of Aussie spending.

We don’t need to spell it out for you, but we will anyway (because it’s exciting) – all signs point to hospitality venues reaping the benefits of BNPL. The best news? Payo is the brand who’s going to bring it to them.

We’re big believers in living a little (and enjoying a lot). As long-time hospo workers ourselves, we understand that the best indulgences are ingested. From ritzy birthday cocktails and romantic feed-me menus, to celebratory dinners and mind-blowing degustations, the best things in life come on crockery. In fact, we spend more money on eating out than dressing up, which is why it makes sense to pay with payo.

It’s also why we’ve made it our mission to help people eat now and pay later. Not only does it allow Aussies to upgrade their dining experience and pack more oomph on their plate, but it helps local business get back the dollars lost to COVID. And if the stats are anything to go by, BNPL is only going to get bigger in this biz.

Ready to add your venue’s name to the long list of local bars and eateries in Brisbane, Gold Coast, Melbourne and Sydney? Join us at the table (and on the app!) by enquiring here.

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