According to the press release, Klarna’s quarterly global Pulse reports underline consumers’ difficulty to understand the costs of using 'traditional' payment methods, such as credit cards, and their overall shopping and money management behaviour. While consumers may have missed the social aspects of shopping in-store, the trend towards online shopping under lockdown looks set to stay. In the UK almost half (48%) of consumers shop online at least once a week, up 26% from Q1, leading to a shift away from cash and towards credit and debit cards, and other alternative payment methods.
With the shift towards online shopping continuing, Klarna’s Pulse report highlights the challenges consumers face when it comes to using credit cards. Over a quarter (26%) of UK-based consumers do not know how much interest their credit card charges, while 15% only pay off the minimum amount each month and 23% have incurred unexpected credit card costs.
The majority of UK consumers (66%) own at least one credit card, with 23% of them using it as their main card for purchases and 43% for emergencies or sporadic high ticket purchases. However, almost two thirds (59%) would rather go to the dentist or do household chores than read their credit card’s fine print or work out the cost of its APR. Surprisingly, this is particularly true for those with a high interest in personal finance. When it comes to payment preferences, a quarter (26%) of UK consumers have used BNPL, enabling them to defer payments or pay in instalments.
Moreover, the majority of consumers use BNPL because they want to offset the risks of online shopping – which is set to increase in the future. However, almost 4 in 10 (37%) feel shopping online can be risky. In fact, more than 6 in 10 (62%) of those who use BNPL said that the main benefit of paying after delivery is to be able to check a product before paying, while almost half (45%) of BNPL users said paying only for the products they keep was one of the main benefits.
Interestingly, the research also found that while most people have heard of BNPL (85%), only a quarter (26%) have actually used it, explaining the high level of confusion about how BNPL works among non-users.
The Klarna’s consumer research was conducted in cooperation with Nepa across 9 markets (the US, UK, Australia, Germany, Austria, the Netherlands, Sweden, Norway, and Finland). All stats used in the above release are from the UK market only, unless otherwise specified.
The research was conducted during May 2021, and includes a minimum of 1,000 respondents in each market (2,020 in the UK). In total, more than 10,000 consumers participated. The sample sizes are nationally representative and have been selected by research agency Nepa.
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