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The impact of buy now, pay later services
Buy now, pay later services, including Zip and Afterpay, have a material impact for core retail but pale in comparison to national consumption or credit figures, UBS analysis has shown.

The impact of buy now, pay later services
Buy now, pay later services, including Zip and Afterpay, have a material impact for core retail but pale in comparison to national consumption or credit figures, UBS analysis has shown.

UBS said the use of these services has added 50 basis points to core retail, but it will still be less than 0.1 per cent of total consumption in 2019.
The debt impact is also insignificant, with the investment company considering it to have only added around 0.5 per cent to personal credit growth over the same period.
Buy now, pay later (BNPL) payment methods have boomed from less than $2 billion in 2017 to $7 billion in 2019 and will likely surge to $12 billion in 2021.
No effect on credit
While UBS found that 64 per cent of users see BNPL services as a form of credit, it is not counted in Australia’s household debt data.
Even so, assuming BNPL receivables are debt, the current $1 billion amount outstanding is only a fraction of our national household liabilities, which sit at $2.4 trillion.
The investment fund said that even if sales increase and BNPL liabilities grow to an estimated $3 billion by 2021, it will still be significantly less than the personal credit debt of $170 billion.
Despite the new data, comparison service Mozo previously warned consumers to be aware of the potential dangers of BNPL services.
Mozo’s own research revealed that 33 per cent of users said they’d missed at least one repayment on their BNPL, while 14 per cent had missed multiple repayments.
The worst offenders when it comes to missing one or more payments were men aged 18-24 years, with 45 per cent admitting to missing a due date.
“There does seem to be a disconnect between awareness of the negative effects to your finances and action taken to meet payments on time,” Mozo director Kirsty Lamont concluded.
nestegg has previously reported five tips to better buy now, pay later.
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