Market Definition
The buy now pays later (BNPL) is a financial option integrated into the online shopping e-commerce platforms that allow customers to easily borrow & break their payments over a relatively short period with low-interest rates in comparison to the credit lines. Therefore, the growing inclination of consumers towards flexible payment alternatives is a key factor supporting the growth of the market globally.
Market Insights
The Global Buy Now Pay Later market is projected to grow at a CAGR of 23.58% during the forecast period, 2022-27. The rising demand for consumer discretionary products such as electronics, furniture products, etc., among millennials & low disposable income has elevated the demand for buy now pay later service during the historical years. The easy availability of credit, in contrast to the credit lines with low or minimum interest & easy repayment options, has stimulated the revenue growth of buy now pay later service providers. Moreover, the increasing steps taken by players such as PayPal Holdings, Klarna, and others in expanding their product portfolio & catering to the emerging need for finance among the young populace by launching solutions with interest-free buy now pay later installments via service providers have greatly supported the market's revenue growth. For instance:
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2017-20 |
| Base Year: 2021 | |
| Forecast Period: 2022-27 | |
| CAGR (2022-2027) | 23.58% |
| Regions Covered | North America: The US, Canada, Mexico |
| South America: Brazil, Argentina, Rest of South America | |
| Europe: Germany, France, Italy, The UK, Russia Spain, Rest of Europe | |
| Asia-Pacific: China, Japan, India, Australia, Rest of Asia Pacific | |
| Middle East & Africa: The UAE, Saudi Arabia, Nigeria, Egypt, Rest of Middle East & Africa | |
| Key Companies Profiled | Klarna, Afterpay, Affirm Inc., Laybuy Group Holdings Limited, PayPal Holding Inc., Kredivo, Zip Co. Ltd., Splitit, Sezzel, Amazon, Flipkart, Scalapay S.R.L., Perpay Inc., Paytm, PayI8r, Others |
| Unit Denominations | USD Million/Billion |
Furthermore, growing initiatives by financial service providers such as American Express, Visa, MasterCard, and others to provide easy access to finance to their customers through the launch of buy now pay later (BNPL) services have boosted revenue growth of buy now pay later service providers in the coming years.
Key Trend in the Market
Businesses in various industries are eagerly integrating the buy now pay later option on their websites in order to capitalize on benefits such as the ability to generate a high volume of sales leads through increased traffic on the e-commerce platform. Therefore, the integration of buy now pays later as an alternative is estimated to offer lucrative opportunities for driving the revenue growth of businesses by offering customers flexible payment options & attracting payback discounts and other offerings, including loyalty programs, etc. Further, realizing the benefits of buy now pay later adoption, several online selling merchants have engaged with the service providers to generate sales leads.
Moreover, the rising business-to-business partnerships to cater to the emerging consumer demand for digitalized payment alternatives keeping in view the merchants’ interest, are anticipated to boost the revenue growth of buy now pay later service providers in the coming years.
Impact of COVID-19 on the Buy Now Pay Later Market
The buy now pays later service providers gained significant traction during 2020 as a result of a surge in the number of online buyers. The increase in the purchase of healthcare products & consumer electronics, among others, from e-commerce websites globally, despite a decrease in disposal income, supported the revenue growth of the buy now pay later market. Moreover, the deterrence of banking & financial institutions to sanction the short-term credits during the crisis made an immense contribution to the revenue growth of buy now pay later service providers instead of the advantages such as easy availability of credit on lower interest rates. Furthermore, e-commerce platforms such as Flipkart & Amazon, among others, rapidly integrated the buy now pay later services during cart checkouts, which attracted millions of customers to opt for the services
