Global Buy Now Pay Later Market Research Report: Forecast (2023-2028)

Market Definition

The buy now pays later (BNPL) is a financial option integrated into online shopping e-commerce platforms that allow customers to easily borrow & break their payments over a relatively short period with low-interest rates compared to credit lines.

Market Insights & Analysis: Global Buy Now Pay Later Market (2023-28)

The Global Buy Now Pay Later Market size was valued at around USD7.2 billion in 2022 & is projected to grow at a CAGR of about 18.5% during the forecast period, i.e., 2023-28. The rising demand for consumer discretionary products such as electronics, furniture, etc., among millennials and the growing inclination of consumers towards flexible payment alternatives 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 Global Buy Now Pay Later Market growth. Given the lucrativeness of such services, numerous new players are also entering the market, further stiffening the completion. For instance:

• In March 2023, the tech giant Apple rolled out its buy now, pay later service called Apple Pay Later to US customers with further expansion plans in the pipeline. The service enables users to split purchases into four interest-free payments over six weeks. This move by Apple is anticipated to disrupt the fintech sector, bringing about a paradigm shift in the market landscape.

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.

Global Buy Now Pay Later Market Driver:

Growing Adoption of BNPL for Quick & Easy Transactions: The growing propensity of the young age population towards the adoption of digitalized services, owing to advantages such as attractive product offerings, quick & easy account settlements & transactions, have significantly increased the penetration of buy now pay later service providers across the globe. Moreover, an increase in the launch of gaming & smart devices has contributed to attracting millions of youngsters to opt for buy now pay later services as it enables easy access to electronic wallets for quick payments & easy repayments. These factors are conjointly supporting the revenue growth of buy now pay later service providers globally.

Global Buy Now Pay Later Market Possible Restraint:

Higher Interest Rates & Availability of Substitutes: Despite the growing integration of buy now pay later services in online retail platforms, there is a lack of acceptance among the adults in developing & underdeveloped nations, including South America, Asia-Pacific, and the Middle East & Africa due to high amounts of interest levied on delayed payments. This has discouraged many potential customers to adopt BNPL services. Moreover, the easy availability of substitutes, such as post-dated checks, credit cards, etc., for the individuals with low-interest rates has hindered the growth of buy now pay later service across developing & underdeveloped nations.

Global Buy Now Pay Later Market Trend:

Rising Digitalization in Business-to-Business Payments: 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.

• In 2021, Bonsai announced a partnership with Afterpay to allow Bonsai customers to purchase products directly within BuzzFeed content via Bonsai & pay for their purchase in four interest-free installments with Afterpay.

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.

Global Buy Now Pay Later Market (2023-28): Segmentation Analysis

The Global Buy Now Pay Later Market study from MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–2028 at the global, regional, and national levels. Based on the analysis, the market has been further classified as:

Based on the Sales Channel:

• Online
• Point of Sales

Among the two, the online sales channel captured a dominating share of the Buy Now Pay Later Market during 2018-21. The growing adoption of e-commerce platforms globally to buy a wide range of products, including electronics, groceries, clothing, and accessories, using digitalized banking solutions and services, has significantly contributed to the demand for buy now pay later services from online sales.

Moreover, the rapid expansion & integration of buy now pay later services on e-commerce platforms such as Amazon, Klarna, and Flipkart, among others, provided customers with hassle-free checkouts despite the lower availability of income and also provided lucrative opportunities for the growth of the market. For instance, in 2021, Amazon India reported over 2 million pay later signups on the site 2020. This is expected to churn the demand for buy now pay later services in the forthcoming years as well.

Based on the Application:

• Healthcare
• Clothing & Accessories
• Media & Entertainment
• Travel & Leisure
• Consumer Electronics
• Others

Of them all, consumer electronics acquired a major Global Buy Now Pay Later Market share during 2018-21. It is one of the rapidly evolving and highly innovative industries, with hundreds of newly launched electronics recorded over a year. Rising urbanization & digitalization trends, as well as the emerging need for consumers to adopt the latest technologies & services, have all contributed to a rapid increase in consumer electronics demand in recent years.

Furthermore, the higher price of electronics & the buyer's low disposable income have made a significant contribution to the global demand for buy now pay later services, as buy now pay later services enable the buyer to fulfill its requirement of purchasing the gadget while removing the burden of paying large sums in one go.

Based on the End-User Age Group:

• 18-34 years
• 35-54 years
• 54 years& Above

The buy now pay later services gained striking momentum among the age group of 18-34, owing to an increase in the awareness among the millennials & generation Z about the financial advantages such as the reduction in interest rates, long payback period, and ease of credit availability. Notably, this age group has a mix of consumers ranging from students to early-age working professionals who have limited income & higher utility needs, such as smart devices & other consumer electronics, among others.

Moreover, the lower availability of financing solutions & services, including credit cards & credit lines for the age group, has opened up new growth opportunities for the buy now pay later service providers. According to ZestMoney, a BNPL service provider, the buy now pay later services have emerged as a preferential option across the age group of 18 to 34 years, with major investments being made in the up-gradation of Edtech courses, clothing, and electronics.

Global Buy Now Pay Later Market Regional Projection:

Geographically, the Global Buy Now Pay Later Market expands across:

• North America
• South America
• Europe
• Middle East & Africa
• Asia-Pacific

Of all regions globally, the North America Buy Now Pay Later Market has been witnessing notable growth since 2018. The higher presence of Fintech service providers with competitive portfolio offerings has made a notable contribution to driving the demand for buy now pay later services across North America. Further, with the increasing partnerships among the buy now pay later & entertainment service providers across the region, providing consumers with attractive discounts and rewards & loyalties, the demand for buy now pays later services is anticipated to soar in the forthcoming years. For instance:

• In June 2023, Affirm became the first buy now, pay later service provider to be added to Amazon Pay, enabling Amazon Pay merchants in the U.S. to offer their customers the option to “buy now, pay later” using Affirm’s technology.

Global Buy Now Pay Later Industry Recent Developments:

• In 2022, Affirm announced a partnership with Stripe, a financial service provider, to offer Affirms customers to shop & pay through easy installments.
• In 2022, Zip Co. Limited announced a partnership with Swappa, the online marketplace for use tech, to provide Swappa customers with flexible payout alternatives & drive sales leads.

Gain a Competitive Edge with Our Global Buy Now Pay Later Market Report

1. Global Buy Now Pay Later Market report provides a detailed and thorough analysis of market size, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics and make informed decisions.
2. This report also highlights current market trends and future projections, allowing businesses to identify emerging opportunities and potential challenges. By understanding market forecasts, companies can align their strategies and stay ahead of the competition.
3. Global Buy Now Pay Later Market report aids in assessing and mitigating risks associated with entering or operating in the market.
4. The report would help in understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks and optimize their operations.

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