Why are more people in Europe choosing Buy Now, Pay Later instead of credit cards?
As prices rise and monthly budgets get tighter, shoppers are looking for simple ways to buy what they need without feeling stressed.
Credit cards often come with high interest, while loans can be hard to get and slow to process.
This has led to more people turning to BNPL services. These let users pay over time, without interest, and often with just a few clicks. It's fast, easy, and feels safer to many.
In this blog, we’ll explore what’s behind this shift, what BNPL is, how it works, and why it’s growing so fast across Europe.
What Is BNPL, and How Does It Work?
BNPL stands for Buy Now, Pay Later. It’s a type of payment system that lets people buy something today and split the cost into smaller payments over time.
Most of the time, you don’t pay interest if you make your payments on time. Some BNPL plans allow you to pay in four parts over a few weeks. Others stretch payments over months.
BNPL is different from a credit card. With a credit card, you can keep a balance and pay interest. But with BNPL, the plan is fixed and short-term. You know exactly when and how much you need to pay.
Popular BNPL companies like Klarna, Scalapay, and Clearpay offer easy options right at checkout, especially in online stores.
Rising Demand for Flexible Payment Options
More people across Europe are choosing flexible payment methods. Paying all at once is hard for many, especially when costs are high. A study by Statista showed that over 50% of Gen Z and Millennials in Europe have used BNPL in the last year.
One reason is income uncertainty. Jobs are changing, inflation is rising, and people want ways to manage money better.
Another reason is that younger shoppers don’t trust banks and credit cards like older generations do. They want easy and clear options without hidden fees.
BNPL gives them more control. It feels more flexible, simple, and direct.
Key Drivers Behind the Growth in Europe
The BNPL market is growing fast in Europe. Let’s look at why:
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Online shopping is rising. COVID-19 changed how people shop. More people now buy online, and BNPL fits perfectly into that habit.
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Young users prefer it. Gen Z and Millennials are digital-first. They like tools that are fast and mobile-friendly.
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Retailers like BNPL, too. Stores use BNPL to attract more buyers. When people see they can pay later, they are more likely to buy. Some stores say sales increase by up to 30% when they offer BNPL.
Together, these things are making BNPL popular all across Europe.
Popular BNPL Companies in Europe
Many companies now offer BNPL services. Here are some of the biggest ones in Europe:
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Klarna – Based in Sweden, Klarna is one of the top BNPL providers. It works in many European countries and is known for its smooth app experience.
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Scalapay – A leading BNPL option in Italy and France. It’s growing fast among fashion and beauty stores.
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Alma – A French BNPL company that works with thousands of local stores.
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Clearpay – The European branch of Afterpay, mostly active in the UK.
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PayPal Pay Later – Offers short-term BNPL plans in many European countries using PayPal’s trusted system.
These companies are changing how people shop, both online and in physical stores
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Concerns and Risks for Users
BNPL sounds great, but it’s not perfect. There are a few risks to keep in mind:
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Late fees – If you miss a payment, you may be charged a fee. These can add up quickly.
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Overspending – BNPL makes it easy to buy now. But people may spend more than they should.
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No full credit check – Some providers don’t check your credit history deeply. That can make it harder to see if someone can really afford the purchase.
It’s important for users to stay careful. BNPL is not free money—it’s still debt, just in a different form.
How European Regulators Are Responding
As BNPL grows, regulators are starting to watch it more closely.
In the UK, the government plans to introduce new rules that make BNPL companies check if people can afford to pay. They also want these companies to explain terms clearly.
Germany and France are also studying the risks. Some groups want more limits on who can use BNPL and how much they can borrow.
The goal is to protect people, especially those with low income or poor credit.
Future of BNPL in Europe
The future of BNPL in Europe looks busy. Experts think the market will grow by over 20% each year until 2027, based on reports from Allied Market Research.
We may also see new features like:
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BNPL for travel or health costs
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More partnerships with banks and mobile apps
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Tighter rules to keep users safe
Fintech companies will continue to shape this space, but they’ll need to balance growth with responsibility.
Final Thoughts
The BNPL market in Europe is booming because it meets real needs. People want easier ways to manage money. They want to avoid interest. And they want fast, mobile-first tools that work where they shop.
BNPL isn’t perfect, but it gives shoppers more choice. With better rules and smart use, it can help people stay in control of their money while getting what they need.
If you plan to use BNPL, take a moment to read the terms, set a budget, and stay on top of your payments.
FAQs
Is BNPL available for in-store purchases in Europe?
Yes, many BNPL providers like Klarna and Clearpay offer options for physical store payments using QR codes or linked apps.
Does using BNPL affect your credit score?
In most cases, BNPL doesn’t affect your credit score unless you miss payments. However, this might change with new regulations.
What is the maximum amount I can spend using BNPL?
Limits vary by provider and country. Some users can spend a few hundred euros, while others may get approved for more based on history.
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