The use of buy now, pay later products – like Afterpay, Zip Pay, Openpay and Humm – has more than doubled in the past year, according to new data from global fintech firm Worldpay.

The data shows that BNPL apps were used in 8 per cent of all e-commerce transactions in Australia in 2019, compared to the 3 per cent in 2018, an increase of 166 per cent.

This still represents a small fraction of total retail transactions, since e-commerce makes up less than 10 per cent of retail sales. But the figure is likely to rise as BNPL apps are taken up by shoppers more broadly, not just the early adopters.

Nearly two million Australians – around one in 10 – used a BNPL product in 2019, and over four million – one in five – will use BNPL by 2023, according to Worldpay’s data.

Growing familiarity and trust in BNPL will drive in this uptake, as well as generational shifts. Another factor, however, may be the growing number of BNPL products available. Latitude Pay, Klarna and LayBuy all launched in Australia in the past 12 months.

Phil Pomford, Worldpay’s general manager for global e-commerce in APAC, said consumers are responding to the “unrivalled convenience” of BNPL apps, which allow users to split up the cost of a product into instalments.

“[These] products have emerged as an attractive option for consumers seeking an alternative to traditional credit cards and have surged in popularity over the past year,” Pomford said in a statement about the report’s findings.

Since the rise of BNPL, there have been calls to regulate the instalment payment products in the same way that credit cards are regulated in order to protect consumers in financial hardship from taking on too much debt.

In January, most BNPL providers voluntarily signed on to an industry “code of conduct”, promising to cap late fees and refrain from targeting the financially vulnerable.

Now the focus is on the impact of BNPL on retailers and other businesses that offer the payment option at the point of sale.

Currently, merchants are banned from passing on the 3-6 per cent fee they pay BNPL providers to the customer.

According to the Australian Financial Review, the Reserve Bank of Australia is considering the issue as part of its review of payment system regulation.

The Worldpay report also revealed that 22 per cent of Australians used digital and mobile wallets, such as Apple Pay, Google Pay and PayPal, online in 2019, and 6 per cent of all transactions were made using these methods.

At physical checkouts, cash and card (debit and credit) are still king, accounting for 87 per cent of payments in 2019.