According to the survey, 38% of UK consumers will make more use of interest-free credit options to manage their finances in the next 12 months.

In addition, the survey reveals that 86% of respondents are concerned about the impact of inflation and the cost-of-living crisis on their ability to pay for goods and services; roughly half of those surveyed (45%) expect to spend less on non-essential items, such as eating out, clothing and holidays in the coming year.

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POS finance is a lending option that allows consumers to pay for big-ticket items over a longer period of time. It differs from the buy-now-pay-later sector, which is a short-term source of finance, in that POS lending often comes with interest rates, with consumers hence paying more for a product.

However, unlike BNPL loans, POS finance requires a credit check to ensure consumers pay back any money owed to the lender.

BNPL loans, POS finance and the cost-of-living crisis

BNPL loans, which are kept interest-free if paid on time, were dealt a significant blow in 2022 when many customers defaulted on payment due to the worsening cost of living.

According to Financial Times, demand for BNPL loans has increased among older people, with almost a fifth of over-65-year-olds saying in January 2023 that they had used BNPL loans or intended to do so in the next 12 months. Last year, some BNPL companies were forced to underwrite significant debt to reset their customer dealings.

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This, in turn, drove down their share price amid fears that the business model was no longer sustainable in a world where living conditions would oscillate between bad and worse and market prices stayed volatile.

DivideBuy’s survey claims that only 38% of its customers earn over £30,000 per annum, while 45% are over 40 years old.

“The numbers speak for themselves: customers expect a seamless UX, interest-free options, flexible payments and zero late fees. The days of filling out long application forms, cumbersome checkout journeys and lagging wait times are over. And credit providers must work together with merchants to deliver for their customers, or risk being left behind”, DivideBuy said in a press release statement.

DivideBuy is a UK-based BNPL provider. In September 2021, the company secured a £300m lending facility from Davidson Kempner Capital Management to boost its growth trajectory domestically and internationally.