UK Consumer Finance Trends: A Guide for Growth-Minded Retailers

UK Consumer Finance Trends: A Guide for Growth-Minded Retailers

Retailers know that flexible financing isn't just a perk; it's a vital payment option that many customers expect (or require) to complete a purchases. But with the landscape evolving rapidly, staying ahead means understanding the trends shaping customer access to credit.

In this post, we break down key insights in BNPL, instalment credit, and untapped opportunities to boost conversions and reduce cart abandonment. At FinMatch, we're experts in matching merchants with the right financing solutions to serve all your customers effectively.

‍

Short-term BNPL Widely Available, But Change is Coming...

Short-term unregulated credit like Klarna, Clearpay, and PayPal Credit is booming in the UK. Over 20,000 merchants offer BNPL, and around 22 million consumers (42% of adults) have used it. This flexibility drives sales for low/medium-value baskets. As the market hits £29B in 2025, retailers must adapt.

‍

BNPL Regulation Starts July 2026

Unregulated short-term BNPL products will fall under FCA oversight from 15 July 2026. This brings stronger consumer safeguards, including affordability checks – but expect lower approval rates as lenders tighten criteria. For growth-minded retailers, this is a wake-up call: Review credit offers now to avoid lost sales.

‍

Instalment Retail Credit: Established Leaders and New Entrants

Traditional point-of-sale instalment credit is prevelant in many retail sectors, helping customers finance bigger purchases. Providers abound, with new entrants like Affirm and Lloyds Bank entering the market. This competition means more choices – but also complexity for merchants.

‍

Half the UK Lacks Financial Resilience: An Opportunity in Disguise?

Nearly half (49%) of UK adults are financially vulnerable, with low resilience limiting access to credit. Most lenders exclude this group, leading to high decline rates and cart abandonment—costing retailers dearly. Inclusive financing can capture this underserved market.

‍

Offer Choice, But Guide Wisely to Boost Conversion

Merchants are increasingly providing multiple credit options, from BNPL to instalments. Yet, few guide customers to the best fit – leaving it to chance and risking drop-offs. Guiding customers reduces abandonment and builds loyalty. At FinMatch, we connect you with providers that approve more of your customers.