Buy now pay later services are used by a large and growing number of Australians but spending on BNPL is still a very small proportion of total consumer payments, the Reserve Bank reports. According to the latest RBA Consumer Payments Survey (conducted late last year), almost one-third of Australian consumers used a BNPL service in the previous year, up from around 8 per cent in 2019 when they survey was last conducted. Usage was highest among younger Australians, with more than 40 per cent of people aged 18 to 39 using a BNPL service in the previous year, compared with only 10 per cent of those aged over 65. Users of BNPL had two accounts on average. While a large share of people used the payment method, BNPL made up just 0.7 per cent of the number of payments in 2022 – up from 0.5 per cent in 2019.  The RBA’s view of BNPL is that it is an expensive way for merchants to accept payments, costing an average of 4 per cent of the value of the transaction. Traditional card payments have merchant fees of 0.5 per cent to 1.5 per cent. BNPL providers do not allow merchants to pass on the cost of acceptance through surcharging. “BNPL users are subsidised by non-users as merchants recoup the cost by raising the price of goods and services generally,” the RBA said. Now that the government has committed to regulating BNPL, this “no surcharge” rule applied by BNPL providers may not last.