The relentless march of buy-now-pay-later (BNPL) startups such as Afterpay and Zip into the retail landscape has been confirmed in new research by Roy Morgan that found nearly 60% of Australians, 12.3 million people, are aware of the payment services.
The figures in the latest Roy Morgan Digital Payments Report are up 22.1% points in just 18 months.
Afterpay is the clear market leader with 55.8% of Australians aware of the service by March 2020, up by 22% points since September 2018.
Main rival Zip has nearly doubled its awareness in just 18 months to a little over a third of Australians (35.2%).
The findings come as Afterpay’s) share price hit another record high, climbing 7.5% to $54.52 at Wednesday’s close.
Afterpay’s share price sat under $8 in late March, while Zip’s share price has been on a tear over the last fortnight too, having more than doubled in price to $6.75 since May 22.
Roy Morgan CEO Michele Levine said more than one-in-ten (10.9%) Australians now use BNPL services, with digital payment services gaining prominence during the COVID-19.
“Afterpay and Zip are the clear market leaders for buy-now-pay-later services but their early success in Australia has attracted newer rivals. Newer local rivals include OpenPay, Splitit Payments and Flexigroup which all offer buy-now-pay-later services and indicate the increasingly competitive nature of the market,” she said.
“Australians aged 25-34 have been the quickest to take to the buy-now-pay-later services with around one-in-five in this age group using these new digital payment systems.”
Interestingly, there are key demographic differences in the customer bases of the rival BNPL companies, with Afterpay the clear preference of younger buyers
“There are key differences between the two market leaders as Zip’s customer base skews slightly older and their second strongest age group is those aged 35-49 whereas for Afterpay it is the under 25 market,” Levine said
“There are other significant differences between the types of customers both services attract that are drawn out more fully in the Digital Payments Report. The report provides a detailed and in-depth understanding of the Australians using not only buy-now-pay-later services but also bill payment services, online payment platforms, contactless/cardless mobile payments and wearable payment devices.”
Buy-now-pay-later payments awareness trends: 2018-2020