Government · UK · Financial Conduct Authority
UK Buy Now Pay Later 2025: 9 Million Users, £13.8bn Spent
The FCA's Occasional Paper 69, published July 2025, finds UK Buy Now Pay Later transaction value reached £13.76bn in 2024, more than 11 times the £1.23bn recorded in 2019, with nearly 9 million active customers across the four largest UK providers by 2023.
Source published Summarised
Key findings at a glance
- £13.76bn Value of UK Deferred Payment Credit (BNPL) transactions in 2024
- £1.23bn Value of UK BNPL transactions in 2019, the market grew more than 11x in five years
- 9 million Active UK BNPL customers across the four largest providers in 2023, up from 0.3 million in 2017
- 65% Share of UK BNPL transactions occurring in clothing, fashion and footwear
- 9.5% Share of UK clothing, fashion and footwear retail sales completed via BNPL in March 2023
- £67 Average value of an approved UK BNPL transaction in March 2023
- £168 Average monthly BNPL borrowing per active UK user in March 2023
- 75% Share of BNPL repayments made by debit card, only 8% by credit card
- 10% Share of UK BNPL transactions with at least one missed or late repayment in January 2023
- 15 July 2026 Date the FCA begins regulating Deferred Payment Credit under existing consumer-credit rules
What the report covers
The FCA's Occasional Paper 69 is the most authoritative public dataset on UK Buy Now Pay Later usage. It draws on transaction-level records supplied by the four largest UK BNPL providers (the FCA uses the term Deferred Payment Credit, or DPC), which together accounted for over 90% of the unregulated UK BNPL sector at the time. The dataset covers 1.55 million unique individuals, with 1.19 million matched to credit reference agency files for the causal analysis.
The headline finding for UK retailers: BNPL has scaled from £1.23bn of UK transaction value in 2019 to £13.76bn in 2024. That growth pulled BNPL from a checkout-option curiosity to roughly 2% of total UK retail sales and nearly 10% of the clothing, fashion and footwear sector. Active customers grew from 0.3 million in 2017 to nearly 9 million in 2023 across the four firms in the study. Buy now, pay later as a category is well established globally, but the FCA paper is the first time the UK shape of it has been quantified at this level of detail.
The paper sits alongside the Authority's wider consumer-protection work. From 15 July 2026 the FCA will regulate Deferred Payment Credit under existing consumer-credit rules, requiring proportionate creditworthiness assessments and information disclosures from BNPL providers.
What this means for UK marketers
For UK ecommerce operators, the FCA dataset settles a long-running question. BNPL is no longer a niche checkout option to test, it is a payment rail that handles nearly 10% of clothing-sector retail revenue and 2% of overall UK retail. A merchant selling apparel, beauty or homeware without offering at least one BNPL provider at checkout is now standing outside a rail that a meaningful share of UK shoppers actively prefer.
The shape of UK BNPL spend matters for site-experience decisions. The average approved transaction is £67 and the average active user borrows £168 a month, which means BNPL in the UK is primarily mid-ticket discretionary spending, not big-ticket finance. That argues against treating BNPL as a high-basket-only option ("Pay with Klarna available on baskets over £100"). It also explains why fashion retailers, where the typical basket sits in the £50 to £200 zone, dominate UK BNPL volume.
The repayment data is reassuring for merchants worried about chargebacks and consumer-credit fallout. Three quarters of BNPL repayments are made by debit card and only 8% by credit card, so the bulk of BNPL liability sits on funds consumers already hold rather than being layered onto revolving credit. The 10% missed-or-late rate is real, the FCA paper finds BNPL users are roughly twice as likely as the wider UK population to be in arrears, but it is a provider and regulatory concern more than a merchant one. The BNPL provider absorbs the credit risk; the retailer is paid up front.
The July 2026 regulatory start matters operationally. UK merchants should confirm that the BNPL partner they integrate is in the FCA's temporary permissions regime and update product pages, checkout flows and PDP copy so that BNPL options are presented as credit, not as "split your payment". For Shopify operators already using Shop Pay Installments, Klarna or Clearpay, this is mostly a wording exercise. For bespoke ecommerce builds, plan disclosure changes ahead of next year's regulatory switchover. BNPL is one lever in the conversion path; cart-recovery automation is another, see our Klaviyo cart-recovery benchmarks report for the email side of the recovery equation.
How they got the data
The FCA used transaction-level data supplied directly by the four largest UK BNPL providers, which together accounted for over 90% of the unregulated UK BNPL sector at the time. The aggregate growth figures covering 2019 to 2024 come from data the providers supplied for those years. The user-level analysis covers 1.55 million unique customers in total, with 1.19 million matched to credit reference agency files for the causal-impact work. The market-share calculations cited in the paper compare BNPL transaction value against ONS UK retail sales statistics for the same period.
The 27% adoption figure cited in the FCA's October 2023 press release uses a different methodology (self-reported six-month usage from the Financial Lives Survey, c.14 million UK adults) and sits alongside rather than within the Occasional Paper 69 transaction-data figures. Occasional Papers go through independent referee review; the headline market and usage statistics in the paper are reported as the authors' interpretation of the supplied provider data and the FCA notes that other sources may give quantitatively different estimates.
Government · UK
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From Financial Conduct Authority · published 01/07/2025