Insight & Analysis

Press release: Embedded finance solutions top consumer wish list as BNPL growth outstrips other consumer credit

Published: Jun 2022

1st June 2022 – The growth in Consumer Credit lending is being rapidly outpaced by the Buy Now Pay Later market according to Freedom Finance, one of the UK’s leading digital lending marketplaces.

Newspaper press release

Industry figures1 estimate that BNPL lending is likely to increase by 52% to well over £20 billion in 2022 compared to the previous year. The FCA2 estimated that the industry was worth £2.7 billion in 2020 but it has seen rapid expansion since.

These industry estimates coincide with a recent spike in demand for other forms of Consumer Credit as the cost-of-living crisis starts to bite. Net credit card borrowing increased 11.6% in the 12 months to April 2022 according to the Bank of England3.

Overall, consumer credit which includes personal loans and products like car finance has seen a 12-month growth rate of 5.7%. However, this does not account for BNPL lending which has caused concern among industry participants and the regulator, as reports about its everyday use rise.

While BNPL is already a large part of new lending in the UK, it remains a small proportion of the total outstanding consumer credit in the UK, which currently stands at over £200bn according to official figures.

Consumer demand for online integration of financial services, largely within the retail sector, is also driving the development of a growing embedded finance sector which reaches across other sectors like insurance, travel and utilities. An increasingly broad range of lifestyle finance products are emerging to service this space including loans, credit cardit cards other purchase arrangements.

Michael Davidson, Chief Revenue Officer at Freedom Finance, one of the UK’s leading digital lending marketplaces, said: “There is a clear behavioural shift being driven by the growth in online shopping and increasing trust in digital lending. That is why the industry and regulator are reacting to the rise in this type of lending, as consumer demand accelerates innovation in the embedded finance sector.

“While BNPL is clearly the most well known product, embedded finance has many more credit opportunities – that retail and other sectors are beginning to take advantage of – as credit and financial services are integrated into a broad range of online users experiences. Many retailers and businesses in other sectors are rapidly expanding the range of embedded credit options they can provide to help their customers with genuine lifestyle finance needs.

“There is a danger that the focus of BNPL as part of the recent embedded finance movement combined with a cost-of-living squeeze could leave other viable credit options in the shadows. Product choice in this space is essential to ensure customers get the right credit for their needs rather than the quickest, easiest option that may not necessarily be the best.”

  1. – United Kingdom Buy Now Pay Later Market Report 2022: BNPL Payments are Expected to Grow by 50.5% to Reach $29906.2 Million in 2022 – Forecast to 2028:—Forecast-to-2028—
  2. FCA – FCA publishes review into unsecured credit market:
  3. Bank of England, Bankstats tables:

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