More than a third of Australians using BNPL for online payments

Uyen Duong

12th Dec 2025

Australian consumers, particularly Gen Z, are shifting away from credit cards toward more flexible online payment methods. 

A nationwide survey of 1022 Australians aged 18–75 found that 37 per cent had used BNPL in the past six months, an 11 per cent increase year-on-year. More than half of these users selected PayPal Pay in 4, contributing to a 13 per cent annual rise for the service.

PayPal Pay in 4 recorded the fastest year-on-year growth of any BNPL service, according to the PayPal eCommerce Index 2025.

While Millennials remain the largest BNPL user group (53 per cent), Gen Z is driving the behavioural shift. For the first time, more Gen Z Australians used BNPL (38 per cent) than credit cards (32 per cent) for online purchases. Among Millennials, BNPL and credit-card usage were almost equal (53 per cent and 54 per cent).

Gen Z also recorded the highest average transaction value ($166) and the most frequent BNPL use, averaging 3.1 transactions per month.

Andrew Toon, GM of PayPal Australia’s payments business, said Gen Z is reshaping how Australians pay online. 

“They want greater control over how they spend and manage credit, and that’s why flexible, transparent options like BNPL resonate so strongly,” he said.

Rising living costs are also influencing BNPL use. Consumers said they use BNPL to manage cash flow, split large expenses, ease financial pressure and manage budgets. 

They also view BNPL as more flexible than other forms of credit, with 42 per cent saying repayments are easier than with other credit options.

Across all BNPL providers, consumers were 82 per cent more likely to buy from a site that offers BNPL than from one that does not.

“BNPL use in Australia is growing strongly, driven not just by popularity but by the practical financial support it offers during this time of high living costs,” said Toon.