Roy Morgan: More Australians are aware of Afterpay than PayPal and BPay
The latest Roy Morgan Digital Payments Report shows 82.8% of Australians aged 14+ are now more aware of buy-now-pay-later services such as Afterpay, Zip and Klarna than platforms like PayPal or BPay.
Awareness of buy-now-pay-later payment services is now clearly ahead of other digital payment services, with 17.5 million Australians over 14 having a strong familiarity with various BNPL brands.
This figure poses a stark contrast to the 75.6% of Australians aware of traditional online payment platforms such as PayPal and Western Union, and the 71.7% aware of well-established bill payment services such as BPay.
Buy-now-pay-later market leader Afterpay was bought by Silicon Valley tech giant Square for almost AUD $40 billion (USD $29 billion) in December 2021 – the largest corporate takeover in Australian history.
The takeover hasn’t impacted upon growing awareness of Afterpay, now at 81.1%, up 7.7% points from a year ago in June 2021, and up a massive 47.3% points since September 2018.
The awareness of rival services has grown even faster over the last year with over three-fifths (60.7%) of Australians now aware of main competitor Zip, an increase of 7.8% points on a year ago, and just under a third (31.7%) aware of Latitude Pay, also up 7.8% points on June 2021.
The three main buy-now-pay-later services have been joined by a range of smaller fintech companies including Humm, Openpay and newest Swedish entrant Klarna, which entered the Australian market in early 2020.
Commonwealth Bank has invested in the Swedish firm and holds a four per cent stake in Klarna’s unlisted business.
In June 2022, one-in-six Australians (16.6%) were aware of Klarna while nearly a quarter of Australians, 22.1% (up 7.6% points on a year ago) were aware of Humm and just under one-in-five (18.7%, up 5.7% points) were aware of Openpay.
Roy Morgan CEO Michele Levine said awareness about buy-now-pay-later services has continued to grow even as the restrictions on travel and movement imposed during the last two years have been lifted and Australians can now spend their money on a wider range of services:
“The buy-now-pay-later sector enjoyed stellar growth during the last two years as hundreds of billions of dollars of government stimulus, as well as restrictions on travel and extended lockdowns in much of Australia, led to an extended retail spending boom which continues to this day,” Levine said.
“The latest ABS Retail Sales for the month of May 2022 show retail sales of $34.2 billion for the month up 10.4% on a year ago. In comparison, the retail sales for February 2020, before COVID-19 hit, were at $27.8 billion – an annual increase of only 1.9%. A direct comparison between the two months shows retail sales increasing over $6.4 billion in just over two years – up over 23%.”
“Although Afterpay is clearly the market leader and with easily the highest awareness at 81.1% of Australians, they have been joined by several competitors in recent years. The most prominent is the Sydney-headquartered Zip, known of by over three-fifths of Australians (60.7%).
“General awareness is an important first step, usage of the service is the most important metric to keep an eye on. Now over 4 million Australians (19.1%) used a buy-now-pay-later service in the year to June 2022, up by around 700,000 (+3.4% points) on a year ago, and up from only 6.8% of Australians in September 2018.”
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