Australia Bought Now and Is Still Paying Later

Buy Now Pay Later has stopped being a novelty in Australia and become a fixture of the checkout. Just over half of adults used it in the past year, and a large minority reach for it every month. The country is now a reference market for how instalment payment settles into ordinary spending, watched closely by regulators and providers in the US, UK and Europe who want to see where the model lands once it matures.

The backdrop is a market of real scale. BNPL payments in Australia were expected to reach USD 12.95 billion in 2024, growing 14.7% that year, with adoption forecast to compound at 9.5% a year through 2029 (ResearchAndMarkets.com, 2024). This study asks what that market looks like from the user's side: who leans on it, who slips behind, and what happens when the rules change.

Awareness has sat above 90% for years, so the interesting number is no longer whether Australians know BNPL, but how often they use it. With 26% reaching for it monthly and 14% weekly, the behavior has the cadence of a core payment method, not an occasional one. The pairing that gives the headline its weight sits one section down: nearly three in ten of these users have already fallen behind.

BNPL has crossed from novelty to habit: one in four Australians now uses it every month.

Nearly three in ten, and the strain runs young. Twenty-nine percent of BNPL users missed or were late on at least one payment in the past 12 months. Among users aged 18 to 34 that rises to 38%, against 27% at 35 to 54 and 17% among those 55 and over. The cohort using BNPL most is the same cohort slipping behind on it most.

That overlap is the finding regulators built the new rules around. The convenience that drives adoption, instant approval and split payments with no visible interest, is the same mechanism that lets a young user stack more instalments than the budget can carry. Australia's cost-of-living squeeze, which pushed many toward BNPL for essentials rather than treats, sharpened the risk for exactly these buyers.

The people using BNPL most are also the ones falling behind on it most.

The market has a young center of gravity. BNPL usage runs from 63% among 18-to-34-year-olds to 49% at 35 to 44, 39% at 45 to 54, and 28% among those 55 and over, a 35-point spread from youngest to oldest. Every step up the age ladder is a step down in usage, and the drop is steep.

This lines up with the wider market read. Analysts tracking Australian BNPL note adoption is highest among younger shoppers, driven up over recent quarters as inflation ate into disposable income (ResearchAndMarkets.com, 2024). The under-35 group is both the engine of the market's growth and the cohort the new credit rules are written to protect.

BNPL in Australia is a young person's payment method, and the youngest cohort uses it more than twice as much as the oldest.

Heavily, and getting more so. Fifty-seven percent of users put most of their BNPL spending through a single provider, 24% split it across two, and only 19% spread it over three or more. Four in five users keep their instalment life inside one or two apps.

The user data mirrors what is happening on the supply side. The market has consolidated around a handful of large operators, with Afterpay and Zip anchoring merchant coverage across national retailers, and the incoming licensing regime is expected to push smaller providers to merge or exit rather than carry the compliance cost. Concentration among users and concentration among providers are reinforcing each other.

Four in five users keep their BNPL spending inside one or two apps, a market that concentrates as it grows.

For the young, increasingly yes. Forty-three percent of users aged 18 to 34 say they prefer BNPL over a credit card for discretionary purchases, against 24% of those 35 to 54 and 11% of those 55 and over. Where older Australians treat BNPL as one tool among several, the youngest treat it as the default.

This substitution is the strategic heart of the story. A generation forming its first payment habits around instalments rather than revolving credit is a structural shift for banks, not a passing preference, and it is precisely the behavior the responsible-lending rules are chasing. If BNPL is functioning as credit for under-35s, regulators reason, it should carry credit's protections.

For Australians under 35, BNPL is not an alternative to the credit card, it is the replacement.

Still climbing. The share of adults using BNPL at least monthly has risen every year since 2021, from 14% to 18% to 21% and then to 26% in 2024. The habit did not stall as the market matured; it accelerated through the cost-of-living squeeze.

The shape matches the market forecasts, which put annual adoption growth near 9.5% through the rest of the decade even as the sector regulates (ResearchAndMarkets.com, 2024). The steepest jump in monthly use came between 2023 and 2024, the same stretch in which household budgets were tightest, which is what a cost-driven payment habit looks like when you chart it.

Monthly BNPL use did not plateau as the market matured, it accelerated into 2024.

Regulation reads as reassurance, not restriction. Forty-seven percent of respondents say stricter regulation and responsible-lending checks would make them more willing to use BNPL, 39% say it would make no difference, and only 14% say it would make them less willing. The rules are more likely to grow the market than shrink it.

The timing is pointed. In late 2024 the Australian Parliament passed the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act, folding BNPL into the National Consumer Credit Protection Act and requiring providers to hold a credit licence from 10 June 2025 (ASIC, 2024). The survey suggests users will greet those checks as a trust signal rather than a barrier.

The rules arriving in 2025 look more like a growth signal than a brake: shoppers trust BNPL more when someone is watching it.

Intent points to continuity. Sixty-eight percent of current users expect to use BNPL the same amount or more over the next 12 months, 52% say the incoming licence regime makes no difference to their plans, and 37% say they would use it more if providers ran clearer affordability checks. Only 11% expect to cut back.

The read for providers is that the regulated market is not a smaller market. Users are not deterred by oversight; a meaningful share are drawn in by it. The firms that treat the licence regime as a trust product, rather than a compliance cost, are positioned to take share from those that treat it as a burden.

The regulated BNPL market is not a smaller one: only 11% of users plan to pull back as the rules arrive.

The number that frames the rest is the pairing at the top: 51% of Australians use BNPL, and 29% of those users have already missed a payment. The market is mature, concentrated, and young, and it is heading into its first year of real credit regulation with a repayment problem already built into its most active users. Yet the users themselves are not asking for the exit, they are asking for guardrails: 47% would use BNPL more if it were regulated, and only 11% plan to cut back. The rules taking effect in June 2025 will test whether a market this deep can be made safer without being made smaller. The shoppers, at least, say they would welcome the attempt.