In recent years, the Buy Now Pay Later (BNPL) payment system has gained ground among payment alternatives, recording an increase of +18% in the value of global transactions in 2023 compared to 2022. It has reached over 5% of the global spending on e-commerce, equivalent to more than 316 billion dollars. Even in Italy, this sector has seen strong expansion.
CRIF conducted an in-depth analysis of its data ecosystem, which includes over 110 million credit positions, to examine the trends and characteristics of BNPL in our country, both in terms of demand and use by digital consumers, and in evolution of the offer.
In Italy the value of loans granted has grown by 35% in one year
According to CRIF research, in the second half of 2023, the value of BNPL loans disbursed increased by +35% compared to the same period of 2022, driven by the spread of e-commerce. This continued development of BNPL can be attributed to several key factors, such as its transparency, convenience, and integration with e-commerce. The growing attention to regulation by regulatory bodies promotes trust and stability in the system, ensuring a safer environment for consumers and businesses.
Although the exponential growth of recent years seems to have slowed down, BNPL continues to grow in Italy, consolidating itself as a stable and user-friendly instrument in the financial landscape. The value of BNPL loans disbursed in the second half of 2023 is much higher than the performance of Small Ticket consumer credit, which recorded a slight decline on products such as household appliances and electronics.
New sectors and new targets
The BNPL offer in Italy is expanding towards new sectors such as travel, insurance and services. Furthermore, the extension of the banking offer towards payment deferral solutions and the introduction of models similar to BNPL, such as “Save Now, Pay Later”, are accelerating the development of the market.
The population that uses BNPL is mainly made up of young people from Generation X and Millennials, but there is also an increase in use by Baby Boomers. BNPL users in Italy have a significantly higher average income than the traditional Small Ticket segment.
The level of customer risk for BNPL is decreasing compared to 2022 and lower than that of Small Ticket financing. BNPL is also contributing to financial inclusion, with the majority of new users applying for this type of product as their first access to credit.
The two types of BNPL in Italy
In Italy, there are two types of BNPL: Pay in X and POS Lending, with different user characteristics and behaviors. At a regulatory level, the new European Consumer Credit Directive includes BNPL in its scope of application, introducing rules to protect consumers from the risks of over-indebtedness.
Despite the current economic context, BNPL business models are adapting to meet the needs of consumers and industry operators, diversifying services and developing partnerships with financial institutions. The success of BNPL appears to be that of being a complementary element in the financial offering.