Use of buy now pay later services has grown rapidly over the past year but the number of users is still low, a new survey shows.
According to a Roy Morgan Research poll, 1.95 million Australians used a buy now pay later service in the year to September – up from 1.38 million in the previous 12 months.
A little under one in 10 people (9.4 per cent) of the population are using buy now pay later payments – up from 6.8 per cent a year ago.
Buy now pay later is a payment facility for young people, with 55.9 per cent of users in the 14 to 34 age bracket. A third of users are aged 25 to 34 (this group represents 18 per cent of the population).
Australians over 50, who make up 40.7 per cent of the population, account for only 14.2 per cent of buy now pay later use.
The use of buy now pay later services is growing at the expense of traditional credit card business. According to Roy Morgan, the percentage of Australians with a credit card account is down 3 percentage points over the past year.
Awareness levels of buy now pay later are strong, with 52.2 of people saying they know about the payment facility.
The big player in the market is Afterpay, with 49.5 per cent awareness and 8.4 per cent usage. The number two player is Zip, with 29.3 per cent awareness and 2.8 per cent usage.