Another 29 per cent said the services made them stressed, and 26 per cent said they had used the services despite concerns they could not afford the repayments.
Facilities management worker Nile O’Meally, 26, includes himself in that group. He quit buy now, pay later three years ago after accumulated debt impacted his lifestyle.
“More than being addicted to buy now, pay later, it was being addicted to having nice things. The main thing that it enabled was living above my means,” he said.
“I remember buying a set of tires for my car … Rather than getting sensible, economy tires, I could get the sporty kind, which was not something I really needed to do.”
Buying things and then having to meet the buy now, pay later’s repayments often meant he didn’t have the freedom to attend last minute social events or gigs.
“You have to compromise on things that you love a lot more than the things you bought because you haven’t had a set of savings behind you,” he said.
Up Bank chief executive officer Xavier Shay said customers were “self-aware” of how online shopping lured buyers in and embedded unhealthy spending habits. As such, customers had requested more tools to help them save and spend in a more controlled way.
The digital bank has more than 500,000 customers, with 25 per cent younger than 25.
The broader buy now, pay later sector faces a major shakeup as the government considers how best to regulate the products, and to what extent they should fall under credit laws.
“Let’s have an end to the silly argument about whether buy now, pay later is credit and get on with the next stage of growth for this emerging industry,” Assistant Treasurer Stephen Jones said in July.
In Australia, there are now nearly 6 million buy now, pay later accounts, that make up $11.9 billion transactions a year, or 3.7 per cent of all online purchases.
But ballooning inflation poses an additional challenge for the sector as cost of living pressures increase, while more broadly, ever-increasing competition crimps margins.
Mr Shay said Up’s customers were also responding to rising cost pressures.
“With cost-of-living going up, people are really starting to ask for more tools to help them with their saving and make sure that when they are spending money, it’s on stuff they actually want,” he said.