Older shoppers embracing buy-now-pay-later options such as Klarna – research

The baby boomer generation is showing signs of embracing buy-now-pay-later (BNPL) payment options, with about one in eight Klarna customers in the UK being aged over 60.

Klarna said that the 60-plus group is the fastest-growing age segment.

Over-60s are particularly likely to use the platform to shop for furniture and home essentials, Klarna added.

The top categories of products bought using Klarna has been evolving with the age demographic of its customers.

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Back in 2019, the top three categories were clothing and shoes, followed by health and beauty and home and garden.

But now, while clothing and shoes is still at the top, home and garden has moved into second place and leisure, sport and hobbies has become the third most popular category, Klarna said.

Klarna quoted 74-year-old customer Vivienne Hall, who said: “I use Klarna because I can get things when I want them and can budget easily with the three payments.”

She said she started using Klarna after seeing the payment option on a fashion retailer’s website.

Ms Hall, who lives near Manchester, said she normally uses BNPL services about once every two months and uses it to buy items she would not be able to afford in one go.

She uses Klarna’s app to see what needs paying off and when, or to make payments early.

BNPL can be a way for people to spread the cost of their purchases, interest-free. But concerns have been raised that some people could end up taking on too much debt, which could end up being difficult and costly to pay off.

A guide for lenders in September 2023 from credit information company Experian found that use of BNPL is continuing to grow.

Experian’s analysis indicated that the largest user base is people aged 39 or younger, representing more than half (57%) of users.

But, during 2023, the fastest growth had come from older, less risky customers aged 45 to 64, Experian found.

Its report said BNPL “is no longer a niche credit product”, adding: “Of the 5.9 million unique customers using BNPL, approximately 32% do not hold a credit card, of the 68% that do, 13% don’t carry a balance, with a further 49% having at least 50% of their total credit limit on their card available to them.”

Experian’s report said that, while it would be wrong to say pockets of risk do not exist: “Despite the popular BNPL narrative being on arrears emergence, delinquency, and financial vulnerability, we see the vast majority of BNPL transactions being repaid on time.”