Australians feel the burden of BNPL payments, according to survey

Thursday, 06 July 2023 08:29

Millions of Australians are prioritising their buy now pay later (BNPL) payments before their monthly obligations, according to Australian comparison site Finder.

A Finder survey of 1,090 respondents revealed two in five (43%) Australians have used a BNPL account in the last six months.

Of those who do have an account, one in three (32%) – equivalent to 2.8 million people – have skipped another bill in order to meet their BNPL repayments.

Finder money expert Sarah Megginson said many are too reliant on instalment payments.

“The BNPL system has seen millions of people fear the thought of having to pay for things in one single transaction.”

“Many are going into huge debt thinking they can afford to buy lavish items and pay it off later and get trapped in the cycle of spending money.”

A shocking 14% have missed paying their energy bill to cover what they bought on BNPL.

The research shows one in 10 (9%) have disregarded paying for their personal loan to finance their shopping habit.

The same data (9%) shows many have missed a mortgage repayment.

Some have gone as far as skipping a meal (11%) in order to meet their BNPL repayment on time.

Megginson said while paying in instalments is quite enticing, late fees and account fees can make it more expensive than a credit card.

Research from Curtin University found the fees for missing BNPL payments could equate to a 276.12% effective interest rate based on a $30 purchase and the maximum potential fees.

A separate Finder survey found one in three (33%) could not survive without their BNPL account.

That’s 2.9 million users who admit they wouldn’t cope financially without the help of the new payment plan.

Gen Z (22%) was twice as likely as gen X (11%) to admit they could not survive without BNPL. This was followed by Gen Y (19%).

Megginson said new government regulation will see the BNPL system considered a credit product for the first time ever, which is a step in the right direction.

“People are forgoing essential items in order to meet their repayments on time and the domino effect is unimaginable.”

“The regulation will see lower fees and charges for those who get caught out with multiple transactions draining their account.”

She said it’s important that people manage their BNPL spending without regulations.

“Having more than three purchases on the go at once can be stressful to keep up with, so aim for this as your limit."

Megginson said Aussies should try a delayed gratification shopping strategy where they set aside a purchase for 24 hours.

“BNPL enables impulse buying, so if you can hold off on clicking ‘purchase’, you may find it is enough of a dopamine hit just to ‘add to cart’ without actually committing to buy,” she said.

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Australians feel the burden of BNPL payments, according to survey