The data demonstrates a lack of understanding around how BNPL companies make money. Nearly half (43%) of consumers believe these companies make money on the interest they collect from them. More than one in four (26%) of consumers believe products sold through BNPL are marked up with BNPL providers collecting the difference in cost, and another 21% said BNPL firms earn money through unadvertised fees that are paid by the consumer.
While credit cards are still the primary tool consumers use to finance purchases, 50% of consumers surveyed said they believe consumers need options beyond credit cards for making purchases and paying for them in instalments and 54% of consumers think credit card companies have too much impact on credit scores. 40% of respondents confirmed that their credit card charges an interest rate over 12.99% and another 26% did not know the interest rate they were being charged.
In addition to confusion around interest rates, additional survey findings reveal widespread confusion across how BNPL companies compare to credit companies. When respondents were asked if they would use a credit card over BNPL, 48% said no because they like earning points and/or cashback rewards from credit cards. 25% said they did not trust or understand BNPL, and 20% said their credit card interest rate is lower than using BNPL.
When asked about hesitations around using BNPL, 25% said that BNPL companies do not offer rewards points or cash back like credit cards. 16% said BNPL is not regulated and 12.7% said they simply do not understand how BNPL works. Consumers also expressed a lack of loyalty towards BNPL providers. Only 13.3% indicated that they have a specific provider they always use.
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