The value of transactions taking place via Buy Now Pay Later (BNPL) platforms has climbed 65% during the pandemic, hitting £6.4bn in 2020 alone, new figures have revealed.

This has been driven by a user base that has seen a 75% increase in size, climbing from 5.8 million users to 10.1 million.

The data, from BNPL platform Butter, suggested that the BNPL market now accounts for 5% of all e-commerce transactions, a 2% increase in the last 12 months. 

In just one year alone, the number of debit cards in issue with UK residents has fallen by 6% to 92,172,000. At the same time, credit cards have seen a 3% decline, with just 62,948 now in issue. 

While the value of purchases made immediately via the use of a debit card has climbed 3% on an annual basis, Butter revealed there has also been a decline in those choosing to purchase on credit. The latest data shows that consumers purchased goods on credit totalling £13.9m annually, a figure down 18% on the previous year and during the same time that BNPL transaction values climbed 65%. 

Butter co-founder and CEO, Timothy Davis, commented: “BNPL is just another option open to the consumer when it comes to how they want to transact and we’re never going to see it fully replace the direct purchases made via a debit card or with cash. 

“However, it’s abundantly clear that the greater flexibility, transparency and accessibility it offers over purchasing with a credit card, for example, resonates with today’s consumers. So it’s no coincidence that credit card purchases have declined while the BNPL space has gone from strength to strength.

Davis added: “Today’s consumer wants to know what they’re borrowing, what it will cost them to do so and a clear picture of their repayment timeframe and the BNPL sector offers that while also allowing them to spread the cost of a purchase to suit their individual financial situation.”

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