Buy now, pay later (BNPL) as a payment method has surged in popularity but one in four UK consumers need further education on BNPL schemes, research has revealed.
Three quarters of UK consumers consider themselves to be financially literate when it comes to their understanding of the implications of using BNPL but 24 per cent still require better understanding of the schemes, says ECOMMPAY, the payment service provider and direct bank card acquirer.
In its study with Censuswide, more than half of business leaders (54 per cent) still feel they are facing various challenges in supporting the online financial literacy of its consumers and partners. Only 27 per cent of businesses surveyed felt their efforts to educate consumers about financial tools offered was successful and 26 per cent expressed it was difficult executing policies to help with financial literacy.
ECOMMPAY’s research reveals that 64 per cent of consumers feel financially literate when it comes to open banking and understanding its payment option implications. This is in comparison to the previous year, when just 14 per cent of consumers completely understood open banking.
Yet, more than two-thirds are still not aware of opening banking, suggesting the need for further help.
When it comes to crypto, more than half of those surveyed felt that they were financially literate about utilising crypto assets for payment. However, 46 per cent do not understand crypto or know what it is.
So what to do?
Almost half of business leaders surveyed felt it was the responsibility of banks to educate consumers about online financial literacy, followed by governments (41 per cent), and then payment providers (40 per cent).
Paul Marcantonio, executive director UK & Western Europe at ECOMMPAY, says: “Our research has shown that consumers are broadly confident in their financial literacy and are generally more savvy when it comes to utilising the latest financial tools.
“It’s incredibly promising to see the change in attitudes towards open banking over the past year, which is down to a huge industry effort to help consumers and businesses realise its potential as a secure and fast payment option.
“However, more education and support is still required to ensure all new payment options can be utilised responsibly and consumers are not left in the dark about the implications of trading crypto or agreeing to BNPL schemes. As businesses work to recover and consumers navigate the cost of living crisis, financial education must be a constant to realise the potential of these innovative payment options.”