In Romania more than 80% of Romanians have used or would use BNPL

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Kearney consultancy company has today announced the latest findings of its European Banking Radar, which includes a survey on the use of BNPL, conducted annually in 13 European countries since 2020. The research finds that despite the rapid adoption of BNPL, with almost two-thirds of UK consumers now having used the technology (63%), larger retail banks are still slow to capitalise, with only 1 in 4 BNPL offers coming from a bank (25%).

Strong adoption across Europe

On average, 57% of respondents across all 13 European countries in the Kearney survey have used BNPL at some point. The main reasons given by consumers for using BNPL were helping with personal cashflow management (22%) and the ability to purchase desired products (21%). In terms of geographical variation, consumers in Sweden and Italy were the most likely to have previously used BNPL, with 67% of respondents in those countries having experience with payment deferral for their purchases.

Small, frequent and online

The Kearney report highlighted that BNPL was mostly used for online purposes at checkout. 90% of European BNPL users have used BNPL for a purchase made online compared to only 65% who have used it in a physical store.

Furthermore, while the majority of BNPL users (73%) take advantage of the payment deferral option up to 5 times a year and the rest use it 6 or more times a year, BNPL purchases tend to be relatively low-value. Around 80% of BNPL users typically defer or split the payment for purchases valued up to 250 Euros.

Debt fears remain a deterrent

The major deterrent for those consumers who have not yet tried BNPL is fear of debt and the risk of lowering their credit score (31%). Other deterrents include concerns that BNPL might turn out to be an expensive option in the end (15%), while other people just prefer other forms of financing.

However, while debt fears persist, user experience with BNPL shows that 70% of customers have no issues with making repayments on time, and only just over 6% report at least one missed payment.

Romania

In Romania between 15-20% of respondents utilize frequently purchasing in instalments either at point of sale in store or at check-out when purchasing online, or post-purchase. This includes both BNPL offering per-se, which started being utilized in Romania in both e-commerce and physical store chains, but also the credit card offerings that allow possibility to pay in instalments.

The main reasons why Romanians use BNPL or purchasing in instalments is to afford buying the desired product (directly) – 25% of respondents who used this form of purchase & payment, or for better cashflow management – 21%. About 20% of respondents also said they simply wanted to try. When it comes to reasons for NOT having used yet this form of purchasing in instalments, 30% of Romanians mention the fear of debt; however, also about 30% of them say they were simply didn’t offer the option/product.

The most popular categories for using purchasing in instalments are home improvement products (43% of respondents), fashion (37%), personal electronics (30%) and also travel (26% of respondents). Almost 15% of respondents declared they used purchasing in instalments options also for everyday spending.

Almost 30% of Romanians who use this option said they encountered some struggles to pay back some instalments but managed to repay everything in the end; only about 4% report at least one missed payment.

Florian Teleaba, Principal & Bucharest Office Lead at Kearney, comments:

“Offerings like BNPL and alike are continuing to gain traction across Europe and we see that happening also in Romania. More than 80% of Romanians have used or would use BNPL or alike option (either in store or at check-out, or after the purchase; either from a 3rd party financing company at the checkout or from their bank or bank’s credit card function). Despite some fears of debt, a responsible approach from the ‘lender’ side offers consumers an added value through the flexibility of spreading the cost of purchases (especially useful in such inflationary periods); and numbers show most consumers are responsible in managing paybacks. In Romania banks have already made popular years ago the interest-free instalments when paying with a credit card, often in a network/ecosystem of partners; however, as newer players such as embedded finance solutions become widely adopted and enter the market, banks need to act soon to stay in the game, or else they risk losing customers and revenue streams. It is not just offering a product (i.e. small loan), it is about offering an improved purchasing experience, serving better consumer needs/jobs-to-be-done and driving more effective engagement with them. This is something which innovative and nimble non-banking players often understood better, so far; but with a bit different mindset and approach banks should be able to do that even better”.

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