- 38% of UK consumers surveyed have used Buy Now, Pay Later
(BNPL) to make ends meet during the last 12 months, increasing to
61% amongst 26-34 year olds
- 61% of UK consumers surveyed looking to build their credit said
they’d be interested in using BNPL to build their credit score
- 24% of UK consumers surveyed own a credit card affiliated with
a brand
Consumers are looking to new tools and brands to access credit
and other financial services, according to a new survey published
today by Marqeta, the global modern card issuing platform that
enables some of the world’s most innovative embedded finance use
cases. The company released its 2023 State of Credit report which
surveyed 3,000 consumers globally – including 1,000 in the United
Kingdom – highlighting that 38% of UK respondents have used Buy
Now, Pay Later (BNPL) services to make ends meet during the last 12
months, increasing to 61% amongst 26-34year olds.
Consumers are interested in using BNPL to build out their
credit profile
Over the last 12 months, consumers have been increasingly
reliant on credit, with 53% of U.K. respondents reporting that they
are now routinely using credit cards to make ends meet. Exacerbated
by the current economic situation, respondents also reported
concerns with traditional credit options due to inflation or the
increased cost of living making it harder to make minimum monthly
payments on their credit cards (46%). They also reported
accessibility issues, and 46% of UK respondents who have applied
for a credit card in the past 12 months had their applications
denied.
As a result, consumers are turning to new credit options and,
according to Marqeta’s report, they are using BNPL services as a
tool to help build credit and secure access to additional credit
services. Nearly half of UK respondents (47%) reported that they
are looking to build a credit history or improve their credit score
and 61% of them confirmed they were interested in using BNPL to
further improve credit scores and eventually get a credit card.
Forty percent of consumers are very interested or somewhat
interested in being offered the opportunity to use BNPL services by
their current credit card provider, where they would be able to pay
back a purchase over time for a small fee, rather than being
charged interest.
Amongst BNPL users, the most popular feature was lack of
interest fees, and 47% of people who had used BNPL services in the
last 12 months said they chose to use these services due to zero
interest being charged. Other reasons for why consumers chose to
use BNPL included convenience (46%), flexibility (42%) and help
with budgeting (45%). Interestingly, 15% of consumers surveyed
chose to use it because they had no other access to credit.
“BNPL appeared on the market as a strong challenger to the
credit card giants, and was even termed a ‘credit card killer’,
said Todd Pollak, Chief Revenue Officer at Marqeta. “However,
during this period of economic uncertainty, consumers are becoming
more savvy about the different ways to access credit and are doing
so in the ways that best suit them. As a result we are seeing both
pressure for traditional credit providers to offer more flexible
credit services, and consumers using BNPL to access and build
credit, sustain a good credit score and get access to credit
cards.”
When using BNPL, consumers spend in similar patterns to how they
use a credit card, and for both payment methods, the majority of
people reported purchasing items that have an average cost of
between £51-£100 (31% for BNPL, 35% for credit cards).
Consumers looking to brands for embedded credit card
services
UK consumers are becoming more reliant on their favourite brands
to provide credit products with 31% of respondents looking for a
recognisable brand they trust when choosing to apply for a new
credit card, compared to 21% of US respondents.
Nearly one-in-four UK respondents (24%) own a credit card
affiliated with a brand (e.g. British Airways credit card, Tesco
credit card), and 54% consider themselves a customer of the brand
or store, instead of the bank that provides the physical card, and
47% consider the brand to be responsible for customer service.
The report shows that payment cards and credit cards are the
gateway to additional financial products, with 25% of respondents
reporting that they have more than one financial product from their
credit card provider and 42% confirming they had a credit card
first and added additional financial products over time.
“Payment cards in general, and credit cards in particular have
become the new front door to the banking industry,” said Pollak.
“Brands and banks can offer these to deepen their relationship with
customers and increase revenue. Going forward, we are likely to
increasingly see integration of financial services into non-
financial products, giving consumers more seamless access to credit
and the embedded finance experiences they require.”
To download the full report, please click here.
About The 2023 State of Credit Report
Marqeta’s 2023 State of Credit Report marks the third time the
company has surveyed consumers in the US and UK about their credit
preferences. Marqeta’s 2022 State of Credit survey was fielded by
Propeller Research on behalf of Marqeta, surveying 3,046 consumers
ages 18 and up (2,012 in the US, 1,034 in the UK).
About Marqeta (NASDAQ: MQ)
Marqeta’s embedded finance and modern card issuing platform
empowers its customers to create customized and innovative payment
cards and embedded finance offerings. Marqeta’s platform, powered
by open APIs, gives its customers the ability to build more
configurable and flexible payment experiences, accelerating product
development and democratizing access to card issuing technology.
Its modern architecture provides instant access to highly scalable,
cloud-based payment infrastructure that enables customers to launch
and manage their own card programs, issue cards and authorize and
settle transactions. Marqeta is headquartered in Oakland,
California and is certified to operate in more than 40 countries
globally. For more information, visit www.marqeta.com, Twitter and
LinkedIn.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements expressed or implied in this press release include, but
are not limited to, quotations and statements relating to changing
consumer preferences; increasing consumer adoption of certain
digital payment methods, products, and solutions, including credit
card issuing; which payment, banking, and financial services
products and solutions may succeed; technological and market
trends; Marqeta’s business; Marqeta’s products and services,
including credit card issuing; and statements made by Marqeta’s
senior leadership. Actual results may differ materially from the
expectations contained in these statements due to risks and
uncertainties, including, but not limited to, the following: any
factors creating issues with changes in domestic and international
business, market, financial, political and legal conditions; the
effect of and uncertainties related to the U.S. and global
economies and demand for Marqeta’s services and products; the the
risk of ongoing financial services and banking sector instability
and follow on effects to fintech companies, general economic
conditions in either domestic or international markets, including
inflation and recessionary fears, conditions resulting from
geopolitical uncertainty and instability or war, including the
direct and indirect effects on U.S. and global economies, our
business, results of operations, and financial condition; the risk
that Marqeta is unable to further attract and grow its customer
base; the risk that consumers will not perceive the benefits of
Marqeta’s products and services, including digital payment and
banking products and services and credit card issuing; the risk
that Marqeta's products and services do not operate as intended,
including digital payment and banking products and services and
credit card issuing; the risk that Marqeta’s products and solutions
will not achieve the expected market acceptance, including digital
payment and banking products and services and credit card issuing;
and the risk that competition could reduce expected demand for
Marqeta’s products and services, including digital payment and
banking products and services and credit card issuing. Detailed
information about these risks and other factors that could
potentially affect Marqeta’s business, financial condition and
results of operations are included in the “Risk Factors” disclosed
in Marqeta's Annual Report on Form 10-K for the year ended December
31, 2022, as such risk factors may be updated from time to time in
Marqeta’s periodic filings with the SEC, available at www.sec.gov
and Marqeta’s website at http://investors.marqeta.com. The
forward-looking statements in this press release are based on
information available to Marqeta as of the date hereof. Marqeta
disclaims any obligation to update any forward-looking statements,
except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20231023183831/en/
James Robinson 530-913-0844 jrobinson@marqeta.com
Marqeta (NASDAQ:MQ)
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