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Buy Now, Pay Later Services Are Becoming More Popular for Young Europeans

Gen Z and Millennials in Western Europe are using pay-in-installment services and it’s an especially appealing payment option for their winter holiday shopping… 


  • Increasingly more young Europeans using buy now, pay later and pay-in-installment services
  • More brands are building partnerships with BNPL services, or starting their own payment option to allow customers to pay later
  • More than two in five Gen Z and Millennials in Western Europe plan to use BNPL for their holiday shopping this year

More young Europeans are using buy now, pay later and pay-in-installment services to shop than ever. This is in part because these services offer a more flexible way to pay for items, especially when compared to traditional payment methods like credit cards or bank loans. Additionally, interest rates on these installment loans are often lower than those offered by banks, making them an appealing option for consumers—especially Gen Z and Millennials, whom we know are shoppers looking for affordable options. 

But BNPL companies are financial services and as a result are vulnerable to soaring inflation. With the economy slowing down, and interest rates getting higher, the cost of repayment is increasing, impacting big players in the industry. Earlier this year Klarna, one of the major BNPL brands, got rid of 10% of its workforce, showing that this sector is affected by the tough economic times, too. Despite these signs, BNPL is undoubtedly here for the long haul, and the industry is estimated to earn more than a trillion dollars by 2030. And YPulse data shows young Europeans will be driving their popularity, with these stats showing they’re increasingly choosing these services for their shopping: 

35% of young Europeans have already used buy now, pay later / pay-in-installment services vs 29% in 2021

YPulse’s data from WE Shopping and Retail Report shows that 35% of young Europeans have already used buy now pay later / pay-in-installment services, a +6pts increase from 2021. Young Europeans are turning to BNPL options because it gives them the ability to spread payments out over time while offering them a lower overall cost than other loan services. Gen Z and Millennials are also turning to pay-in-installment services because they do not need to prove a good credit score to use BNPL, as opposed to using a credit card. This can put some of them at risk of spending more than they should and increasing their personal debt, which is why the U.K. government has already said it plans to regulate the BNPL market to protect young consumers. 

Because of its growing popularity, the competition is fierce in the BNPL sector, and more companies are incorporating BNPL into their payment options. Specialized BNPL companies such as Klarna, PayPal, and Affirm are even building brand partnerships. But some brand are choosing to create their own version of installment services: Apple recently launched its own version of BNPL with the release of the new iOS 16 software update. While “Apple Pay Later” is only available to U.S. customers, the feature will likely be rolled out in more countries soon. And with the U.K.-based fintech company Tymit announcing it raised £23M to sell its pay-in-installment services to brands as a white label, BNPL will become more accessible to many brands, and become even more mainstream than it is now.

 42% of young European holiday shoppers agree they'll be using pay-in-installment services to shop for the holidays vs 36% in 2021

With the cost-of-living crisis intensifying in Western Europe, young consumers find buy now, pay later payment options an easy way to spend money they might not have at the moment. As a result, 42% of young European holiday shoppers agree they’ll be using pay-in-installment services this holiday season so they can buy what they want, up +6pts from those who said so last year.

As brands have realized that more young Europeans are planning on using installment services for their winter holiday shopping, and there have been many announcements of brands partnering with BNPL companies in the last few weeks. In the U.K., B&M has recently announced a partnership with Klarna to make a buy now, pay later option available for any order over £30. The BNPL option was made available in all 700 B&M stores last month across the U.K., just in time for the holiday shopping rush.  

Deliveroo also recently announced it would start to make buy now, pay later option available to its customers in partnership with Zip, a leading U.K. credit provider. But the fact that European Gen Z and Millennials, who YPulse data shows eat out / order delivery more than 90 times a year, can now use the BNPL option to buy takeaways and groceries on credit has started a controversial debate. Experts are pointing out that customers should not be allowed to buy essentials on credit, and are calling Deliveroo’s move an “irresponsible one.” But despite criticisms of BNPL, it’s clear that young people are continuing to embrace them, and while regulation may change the industry, our data indicates that Gen Z and Millennials will continue to look for ways to pay less in the moment, while still getting what they want.