Buy now, pay later platforms are still booming with new research from Roy Morgan showing in the past 12 months 1.59 million Australians are using platforms like Afterpay and Zip.
The report, Digital Payment Solutions Currency Report showed more than 40 per cent of those using buy now, pay later are millennials and 35.1 per cent of users are Gen Z, with both generations making up 75 per cent of the market.
Baby boomers and pre-boomers only make up 5.3 per cent of the market.
Only 7.7 per cent of Australians use these platforms according to Roy Morgan. The report noted as this has developed over a relatively short time period it leaves a great deal of growth potential among all generations.
Just 12.3 per cent of Millennials and Gen Z currently are using these payment methods and the older generations (baby boomers and pre-boomers) have a very low level of less than 2 per cent.
Norman Morris, industry communications director, Roy Morgan, said, “The payment environment in Australia is facing rapid change as we see innovative new companies, such as Afterpay, changing the way people purchase goods that they may not be able to afford immediately.
“These ‘buy-now-pay-later’ companies are likely to pose a threat to traditional payment types such as credit cards as well as traditional financial institutions, as consumers can access a small amount of credit instantly with no documentation.
“The increasing use of new payment technologies is being aided by the growing proliferation and development of smartphones and wearables with integrated technology such as Apple Pay and Google Pay, and an increasing number of financial institutions enabling their customers to make payments with these devices.”
Awareness for buy now, pay later platforms is at 42.9 per cent, Afterpay leads awareness at 39.9 per cent and Zip is at 19 per cent.
Afterpay usage is at 6.9 per cent usage compared with Zip at 1.6 per cent usage.
Morris said, “Consumers will come to expect the minimum effort when making payments and the industry will need to adapt to these changing expectations by providing more innovative and simpler solutions.
“Traditional financial institutions may need to collaborate with fintechs and other third parties to keep up with the rapidly changing digital payment environment.”
Buy now, pay later platforms have recently let off a sigh of relief after a Senate report handed down last month said it should be regulated but does not need to be seen as a creditor despite one in six young Australians are facing financial hardship from using these services.