Published on 25/06/2024

Payment in instalments | The revolution is underway in Europe

With 70%¹ of French consumers onboard and widespread adoption across Europe, payment in 3 or 4 instalments (or BNPL²) has become indispensable for e-commerce and retail players. Beyond a mere payment method, BNPL offers a strategic opportunity to foster customer loyalty and encourage more responsible consumption. The 3rd edition of the FLOA barometer sheds light on BNPL's pivotal role in consumer behaviour, especially during economic uncertainties. FLOA delves into the latest trends uncovered in this survey.

Consumers embrace BNPL

Payment in 3 or 4 instalments, commonly known as "Buy Now Pay Later" (BNPL), has become deeply ingrained in the shopping habits of both French and European consumers. According to the latest FLOA barometer, 7 out of 10 French citizens¹ now use these payment solutions, with 44%¹ doing so recurrently. To put it into perspective, France is one of the European countries where the use of BNPL is most developed, a sign of a mature national market.

BNPL is now an established part of consumers' everyday lives. The frequency of split payments continues to rise, with 41%¹ of French users making more than eight purchases a year paid for in several instalments (40% of European users). All sectors are affected, with appliances, high-tech products, and travel (for example, paying for airfare in 3 or 4 instalments) making up the top 3 BNPL purchases in France.

Over half of the French population (52%)¹ plans to either maintain or increase their use of BNPL, a figure that reaches 58% in Spain and up to 60% in Italy.

Merchants and payment in 3 or 4 instalments

For merchants, integrating BNPL into their payment offerings has become a key strategic advantage. Nearly a third of French consumers (29%)¹ now consider available payment methods as crucial as customer reviews when selecting a store. Furthermore, over half of French (59%)¹ and European (54%)¹ users would switch brands to access split payment solutions.

Yet, integrating BNPL presents challenges for merchants. Being denied for payment solutions or having to download a specific app can lead to cart abandonment for almost half of surveyed French consumers. To address these challenges, retailers must streamline BNPL integration to deliver a seamless and transparent customer experience, meeting the expectations of today's discerning consumers.

BNPL in the European market

While BNPL has firmly established itself in consumer habits across Europe, Kantar's study for FLOA reveals contrasting trends among countries. While in France and Spain payment in instalments remains popular, with 38%¹ and 32%¹ of regular users, respectively, Germany and the Netherlands lean more towards deferred payment, with 58%¹ and 40%¹ of recurring users.

This diversity in European markets also translates into varied growth rates. Italy and the Netherlands stand out with more pronounced growth, witnessing respective increases in split payment users of 14%¹ and 11%¹ in 2023. This contrast underscores the fact that BNPL players have to adapt to the specificities of each national market to meet consumer expectations.

Payment in instalments: more than just a payment method

BNPL also has the potential to promote more responsible and inclusive consumption. Indeed, 43%² of French people and one-third of Europeans say they are more likely to buy second-hand products if they can benefit from split payment solutions.

This trend confirms how BNPL can actively contribute to the development of the second-hand market, offering broader access to quality items at more affordable prices: 27%¹ of French users and 23%¹ of Europeans say they have already used BNPL to purchase second-hand products (such as paying for an iPhone in instalments, for example).

Split payment solutions also enable consumers to lean towards higher quality or more responsible purchases, with 59%¹ of French people considering them as a means to acquire more sustainable products (55%¹ in Europe).

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