UK Buy-Now-Pay-Later Market Jumps Nearly 20% in 2024 Amid Rising Regulation
Industry value hits around $27 billion while the government moves to tighten consumer protections
The UK’s buy-now-pay-later (BNPL) market surged by nearly twenty per cent in 2024, reaching approximately twenty-seven billion dollars as consumers increasingly embrace flexible payment plans.
According to figures from GlobalData reported by Bloomberg, the rapid growth was driven by major players such as PayPal and Klarna, and new entrants like Affirm, as well as retailer-offered instalment services from companies like Very and Sports Direct.
The expansion marks a tenfold increase in BNPL usage since 2019, reflecting households under pressure from persistent cost-of-living challenges and elevated interest rates for other forms of credit.
Analysts from Juniper Research noted that Britain has now overtaken Sweden in BNPL volumes, establishing itself as one of the most mature and competitive markets globally.
Despite the growth, the industry is undergoing heightened regulatory scrutiny.
The Financial Conduct Authority has announced that from next year BNPL providers will be subject to new rules requiring affordability checks, clearer borrower disclosures and refund rights – bringing the sector in line with traditional credit products.
The Treasury’s Economic Secretary highlighted that the reforms will give shoppers protections “while providing the sector with the certainty it needs to innovate and grow.”
However, the boom comes at a time of muted retailer performance, raising questions about how sustainable the rapid BNPL growth is.
Some firms are entering what may be described as a waning retail environment while regulators and financial advisers caution about affordability risks, particularly for vulnerable consumers.
The forthcoming regulatory framework is expected to reshape industry behaviour by imposing stricter eligibility and transparency criteria.
As the UK prepares to treat BNPL more like regulated credit, industry participants and policymakers alike will monitor how the faster-growing financing option adapts to both consumer demand and regulatory discipline.
According to figures from GlobalData reported by Bloomberg, the rapid growth was driven by major players such as PayPal and Klarna, and new entrants like Affirm, as well as retailer-offered instalment services from companies like Very and Sports Direct.
The expansion marks a tenfold increase in BNPL usage since 2019, reflecting households under pressure from persistent cost-of-living challenges and elevated interest rates for other forms of credit.
Analysts from Juniper Research noted that Britain has now overtaken Sweden in BNPL volumes, establishing itself as one of the most mature and competitive markets globally.
Despite the growth, the industry is undergoing heightened regulatory scrutiny.
The Financial Conduct Authority has announced that from next year BNPL providers will be subject to new rules requiring affordability checks, clearer borrower disclosures and refund rights – bringing the sector in line with traditional credit products.
The Treasury’s Economic Secretary highlighted that the reforms will give shoppers protections “while providing the sector with the certainty it needs to innovate and grow.”
However, the boom comes at a time of muted retailer performance, raising questions about how sustainable the rapid BNPL growth is.
Some firms are entering what may be described as a waning retail environment while regulators and financial advisers caution about affordability risks, particularly for vulnerable consumers.
The forthcoming regulatory framework is expected to reshape industry behaviour by imposing stricter eligibility and transparency criteria.
As the UK prepares to treat BNPL more like regulated credit, industry participants and policymakers alike will monitor how the faster-growing financing option adapts to both consumer demand and regulatory discipline.
