UK Consumers Need Better Education on BNPL & Crypto Payments: Research
A recent research study published by ECOMMPAY, an international payment service provider and direct acquirer of bank cards, on Sunday, July 31, shows that although 75% of U.K. consumers consider themselves financially savvy regarding their understanding of the impacts of using Buy Now, Pay Later (BNPL) payments, 24% still require a better understanding of such methods.
Besides that, the study highlighted that more than half of business leaders (54%) still experience several challenges in supporting online financial education for their customers and partners.
ECOMMPAY research also disclosed that 64% of consumers feel financially literate concerning opening up banking and understanding the impacts of payment options. Only 14% of consumers fully understood open banking compared to the previous year.
In terms of cryptocurrencies, the research showed that more than half of the respondents felt they were financially savvy about using crypto assets for payment. However, 46% said they do not understand cryptocurrency or know what it is.
Almost 50% of business leaders surveyed felt it was the responsibility of banks to educate consumers about online financial education, followed by governments (41%) and payment providers (40%).
Paul Marcantonio, ECOMMPAY UK & Western Europe CEO, commented about the development: "Our research has shown that consumers rely heavily on their financial education and are generally smarter when it comes to using the latest financial tools."
"However, further education and support is still required to ensure that all new payment options can be used responsibly and that consumers are not left in the dark about the implications of trading cryptocurrencies or accepting BNPL schemes. As businesses work to recover and consumers navigate the cost of living crisis, financial education must be a constant to harness the potential of these innovative payment options," the executive elaborated.
Leadership Taking Charge
While the benefits of crypto lending are clear, consumers must be aware of risks and ways to protect themselves as they navigate the growing new industry.
The recent market crash that has seriously hit several crypto lending firms and their customers warrants importance to consumer education.
With the recent growth of cryptocurrency lending, more consumers are realizing a new way of financial freedom. Thanks to the benefits of decentralized financial protocols and blockchain technology.
Customers who cannot get a traditional loan because of a bank's minimum deposit requirement, fees, or a low credit score now have options available to them through crypto lending.
In the U.S., a new non-profit organization, the Digital Asset Advocacy Group (DAAG), was launched in April to educate consumers on the opportunities and risks associated with cryptocurrency lending.
In March, the Treasury Department ordered the Financial Literacy and Education Commission (FLEC) to form a new digital asset financial education subgroup to create consumer-friendly, trustworthy and consistent educational materials, tools and outreach to help consumers make informed choices about digital assets.
During that time, the U.S. Under Secretary of the Treasury for Domestic Finance, Nellie Liang, said that history has shown that, without sufficient safeguards, forms of private money have the potential to pose risks to the financial system and consumers.
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