Cash strapped Brits are forecasted to spend a whopping £3.7bn using Buy Now Pay Later (BNPL) schemes in the run up to Christmas, as the cost of living crisis continues to plunge shoppers into debt.
The figure is expected to rise a staggering 8.8 per cent from the previous year, as more customers under the cosh turn to instalment plans to afford presents for loved ones, a new study from software company Adobe has revealed.
It comes as crucial sales events such as Black Friday and Cyber Monday are set to take place at the end of November, giving the chance for shoppers to buy big ticket items such as computers and phones at a discounted price before the holidays.
Cyber Monday, the online sales event which takes place on the 27th November is forecasted to be the largest day ever for BNPL online spend this year at £153.5m.
Last year, BNPL online spend on Cyber Monday was £134.9m.
The economic downturn has turned an increasingly high number of shoppers to use payments apps such as Klarna and Clearplay to space out their payments.
While they can be helpful for customers, some schemes have faced scrutiny from government officials for lacking the same level of security and regulation as regular credit card providers.
Adobe forecasts that the amount spent using BNPL schemes this year will rise a hefty 26 per cent to £17.2bn.
Families across the UK have been forced to whip out their credit cards more frequently amid the cost of living crisis, leading to a rise in household debt.
According to figures from The Money Charity the average UK adult has had £660 added to their debt pile.
Vivek Pandya, lead analyst at Adobe Digital Insights, said: “After a tough 2023 for the sector, retailers can feel optimistic about this year’s golden quarter with e-commerce expected to grow by 2.7 per cent compared with last year.”
“This year’s growth will be fuelled by the increasing use of flexible payment methods like Buy-Now-Pay-Later and strong spending over Black Friday and Cyber Monday, so it’s essential that retailers gear up for this year’s milestone shopping days.”