Singapore-based consumer insights firm Milieu Insight’s new report “The Big Picture – Payments” exploring consumer payment trends puts a spotlight on the Buy Now, Pay Later (BNPL) sector in Singapore.
The study explored BNPL usage in-depth and found that approximately 19% of the Singapore population aged 16 and above have tried the service, such as Hoolah, Atome or Grab PayLater.
In terms of the profile of BNPL adopters, Singaporeans aged 25 to 34 are most likely to have used such a service. Up to 30% of this age group have used BNPL.
The research also found that 48% of BNPL basket sizes are, on average, S$100 or less. And higher basket sizes of S$501 or more correlates with Singaporeans who have a moderate to high income, of S$6K monthly personal income or more.
The report found that the primary draw factor of using BNPL services is maximising rewards or cashback (67%) followed by promotions (62%).
Interestingly, when asked how BNPL users would have paid for the product/service if the BNPL service wasn’t available, only 5% stated that they “would not have made the purchase”
The research is based on an online poll of 1,737 Singapore residents and is representative of the adult population aged 16 and above.
BNPL has displayed strong growth with the Bank of America estimating that this alternative model grow 10 to 15 times its current volume and reach as much as US$1 trillion in gross merchandise volume by 2025.
However, this boom has also raised concerns of rising consumer debt which prompted the Monetary Authority of Singapore to look into these BNPL schemes which has gone largely unregulated to date.
Stephen Tracy
Stephen Tracy, Chief Operating Officer at Milieu Insight said,
“There’s obviously been some controversy surrounding the rise of BNPL, and how this new sector may affect spending among youth or the financially vulnerable. But we also found that there isn’t a wealth of fresh and relevant data covering how consumers are engaging with the category.
The focus on rewards and rebates as a primary consideration factor to use BNPL also surprised me. We look forward to continuing to track this sector as it evolves.”
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