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Buy now, pay later gains ground as credit cards decline: Report
Over the past year, BNPL has moved up to the second spot for preferred payment methods among online consumers while credit cards have dropped, prompting banks to hop on the fintech bandwagon, a new industry report shows.
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Indina Andamari (right), spokeswoman of digital credit platform Kredivo, speaks on June 25, 2024 during the launch of the 2024 Indonesia PayLater User Behavior report by Kredivo and Katadata Insight Center (KIC) at Artotel Gelora Senayan Jakarta in South Jakarta, alongside KIC executive director Adek Media Roza (center) and Center of Economic and Law Studies (CELIOS) digital economy executive director Nailul Huda. (Courtesy of/Kredivo)
B
uy now, pay later (BNPL) has surged to become the second-most popular payment method in the country as the use of credit cards declines fast, according to new research.
BNPL was second only to e-wallets last year as online shoppers’ preferred method for settling transactions, with 68 percent of users indicating it as their primary credit scheme, according to the 2024 Indonesia PayLater User Behavior report by Kredivo and Katadata Insight Center (KIC).
Marking a rise from 60.9 percent last year, the trend was particularly prominent among women, millennials and those of lower socioeconomic status (SES).
Read also: Pay later or pay never? Bad debt may damage loan growth, analyst warns
While BNPL surged, the report shows that credit card payments saw a 7.1 percent decline in popularity over the past year.
Overall credit card use is also down significantly this year after dropping from 15 percent in early 2024 to 9.5 percent later in the same year.
“The decline in credit card ownership and the rise in BNPL adoption can be attributed to the ease of application and rapid approval process of BNPL services,” KIC executive director Adek Media Roza told journalists on Tuesday during the report’s launch in Jakarta.
