Buy Now Pay Later Market by Channel (Online and Point of Sale (PoS)), by Application (Consumer Electronics, Fashion & Garments, Media & Entertainment, Healthcare & Wellness, Automotive, Furnishing, Others), by End User (Generation X, Generation Z, Millennials, and Baby Boomers) – Global Opportunity Analysis and Industry Forecast, 2023–2030
Industry: ICT & Media | Publish Date: 30-Nov-2024 | No of Pages: 242 | No. of Tables: 161 | No. of Figures: 133 | Format: PDF | Report Code : IC594
Market Overview
The global Buy Now Pay Later Market size was valued at USD 112.17 billion in 2022, and is predicted to reach USD 725.36 billion by 2030, with a CAGR of 22.2% from 2023 to 2030. Buy now pay later (BNPL) is a type of short-term financing that allows consumers to make purchases and pay on a future date. It is generally structured like an installment plan money lending process that involves consumers, financiers, and merchants.
BNPL is a payment option that allows customers to make purchases online and at stores without paying the full amount upfront. It is possible to use BNPL on a wide range of things nowadays. These include small purchases such as clothes, electronic devices, home improvement products, and others.
In addition, the adoption of BNPL technology among individuals is getting very popular as it offers various advantages, such as buying high-cost smartphones and laptops, paying tuition fees and stationery products, and paying canteen bills. The buy now pay later solution provider has introduced zero-interest payment for their customers, making it a more attractive deal.
Rising Trend of Online Shopping among Consumers
The significant acceleration of the banking and health insurance sector services is principally responsible for the growth of the buy now pay later market. The increase in the popularity of online shopping and the expanding e-commerce sales of consumer electronics and retail goods are also credited for this boom.
According to the United Nations Conference on Trade and Development (UNCTAD), the e-commerce sale of retail items increased from 16% to 19% in 2020 compared to 2019. Moreover, increasing online transactions during the pandemic have strengthened the demand for the BNPL service.
According to UNCTAD, the U.K. observed a spike in online transactions from 15.8% to 23.3%. At the same time, China’s online transactions increased from 20.7% to 24.9%. Similarly, the U.S. online transactions increased from 11% to 14%.
Additionally, customers' preferences for online buying have grown globally during the pandemic. Due to the pandemic, more consumers turned to online e-commerce platforms, which prompted various businesses to enter the online market. Several major players increased their investments throughout the pandemic by implementing various business strategies, such as product launches and collaborations.
For instance, in August 2021, Amazon.com, Inc. collaborated with BNPL service provider Affirm Holdings, Inc. to make its buy now pay later service available to certain customers of the e-commerce giant. This partnership enabled customers to use the service via the Amazon application.
Increasing E-commerce Platforms with Online Payment Methods
The BNPL facility allows consumers to purchase items and pay for them over time through installments. This method is becoming more popular around the world. This is due to the growth in the use of online payments in areas, such as banking, health insurance, retail, and other industries. According to the United Nations Conference on Trade and Development (UNCTAD), over 80% of people worldwide used digital payment methods while shopping online in 2020.
Also, increasing e-commerce sales globally in 2021 led to a huge increase in demand for BNPL services. According to the Census Government Organization, in the third quarter of 2021, retail e-commerce sales in the U.S. totaled USD 204.6 billion. Additionally, according to the UNCTAD report, with an increase in retail sales from 16% to 19% in 2020, worldwide e-commerce sales through online platforms hit USD 26.7 trillion. Owing to the global rise in e-commerce sales, there is a significant chance for the market to grow over the projected period.
Furthermore, the growth is supported by increased public awareness of devices and health insurance services. According to the Reserve Bank of Australia, the buy now and pay later service transactions were valued at around USD 10 billion for purchases of goods in New Zealand and Australia in 2020. The value of BNPL service transactions is rising rapidly due to the demand for consumer electronics and health insurance services.
Issue related to high late fee charges
As they provide simple access and disbursement, buy now pay later programs have emerged as the newest trend in the lending industry. Many customers are unaware of the fees that platforms charge for late payments and defaults, despite these schemes allowing consumers to purchase goods now and pay for them later. Once the customers fail to make the payment on time, they are charged with a certain amount of penalty in terms of a late fee.
The late fees on the BNPL platform vary on the basis of the price of the product that the customer buys. Therefore, it is very important to carefully review each BNPL loan’s terms and conditions to understand and avoid these fees. This is one of the major factors that may restrain the growth of the buy now pay later market during the forecast period.
Integration of artificial intelligence (AI) technology
BNPL providers can construct models in real-time and improve decision-making performance using artificial intelligence (AI) and machine learning (ML) technologies. Several market firms are creating unique AI-based models to speed up consumer market penetration. For instance, in January 2022, Temenos launched an AI-based BNPL banking service within the Temenos Banking Cloud platform. The platform uses AI technology to deliver consumer and merchant opportunities through alternative credit products.
Moreover, in February 2021, Credit Intelligence Limited partnered with the Sydney-based University of Technology to boost AI capabilities. The same company, Credit Intelligence Limited, acquired the YOZO fintech platform for adopting AI for business expansion in several areas, such as debt restructuring, debt collection, and debt factors in the Asia-Pacific region.
Credit Intelligence Limited aims to bring AI capabilities for buy now pay later, and financial management for small and medium enterprises. Service providers can construct real-time models and improve decision-making performance using AI and ML technologies. Various market firms are creating unique AI-based models to accelerate their consumer market penetration, which in turn propels the growth of the BNPL market.
North America is projected to dominate the buy now pay later market
Since this region has a flourishing start-up environment, expanding investment, and R&D activity, the buy now pay later industry is growing. The presence and investments made by significant players, including Affirm Holdings, Inc., PayPal, Quadpay, Sezzle, and others, have contributed to the region's growth.
Moreover, the presence of a large number of fintech companies, such as PayPal, Mastercard, Visa, and others, are engaged in various partnerships to offer BNPL services for bookings, e-commerce, holidays, and many more to boost the market growth.
For instance, in September 2021, Uplift, Inc. partnered with SeaWorld Parks & Entertainment, Inc. to offer buy now pay later services for booking hotels and ticket packages for SeaWorld Orlando, SeaWorld San Antonio, and SeaWorld San Diego. In addition, increasing developments of BNPL-based payment applications such as Quad Pay and Affirm among the youth are driving the growth of the market in the region.
Asia-Pacific to witness a substantial growth
Owing to the rapid adoption of online payment systems across the region, there has been a trend of going cashless among many countries in Asia-Pacific. The governments are working hand in hand with the BNPL market players to support this wave. The introduction of various applications and platforms in almost every country boosts the growth of digital payments for the purchase of products, ticket bookings, paying fees, and others.
Moreover, high-speed internet connectivity is one of the vital factors that promote the adoption of online payment technology. The rise in smartphone adoption and increased public awareness of digital payment systems are other significant drivers. Furthermore, the rising investments in BNPL companies drive the growth of the market.
For instance, Atome, a BNPL startup based in Singapore, received USD 500 million, the biggest amount of money invested in Asia-Pacific as of March 2022. Openpay, an Australian fintech firm with a BNPL service, raised more than USD 281 million in total funding as of March 2022.
In addition, the growing number of fintech and BNPL businesses and e-commerce and banking institutions are incorporating these services into their platforms to expand their customer bases. The growing investments by major BNPL companies in newly founded startups to increase their reach and establish a presence in other nations foster the growth of the BNPL market.
For instance, in September 2021, Zip Co. announced to invest USD 50 million to buy a small part in ZestMoney, an Indian BNPL platform. The company aspires to enter new growth markets through this investment. India has a sizable young consumer population that is increasingly drawn to cashless payment methods.
Competitive Landscape
Various market players operating in the BNPL industry include Affirm Holdings, Inc., Atome, Afterpay Limited (Block, Inc.), Klarna Bank AB (publ), PayPal Holdings, Inc., Zip Co Ltd., Sezzle, Scalapay, Block, Inc., Tabby FZ-LLC, and others. These market players are adopting strategies such as business partnerships, expansions, and acquisitions across various regions to maintain their dominance in the buy now pay later market.
For instance, in November 2022, Atome partnered with Airwallex, a fintech platform to deliver merchants to accept the buy now pay later payment option across Hong Kong, Indonesia, Malaysia, and Singapore. Through this partnership, Atome can offer its BNPL services to more consumers to gain a stronghold in the market.
Moreover, in September 2022, Affirm planned to expand its BNPL services to Amazon customers in Canada. Through this development, Canadian individuals will be eligible for the BNPL option. Also, they can split purchases of USD 50 or more into monthly payments.
Furthermore, in February 2022, Block, Inc. acquired Afterpay, an Australian buy now pay later firm. The acquisition aims to enable the companies to deliver better and more compelling financial products and services that provide access to more consumers and drive incremental revenue for merchants of all sizes.
Buy Now Pay Later Key Market Segments
By Channel
-
Online
-
Point of Sale (PoS)
By Application
-
Consumer Electronics
-
Fashion & Garments
-
Media & Entertainment
-
Healthcare & Wellness
-
Automotive
-
Furnishing
-
Others
By End User
-
Generation X
-
Generation Z
-
Millennials
-
Baby Boomers
By Geography
-
North America
-
The U.S.
-
Canada
-
Mexico
-
-
Europe
-
The U.K.
-
Germany
-
France
-
Italy
-
Spain
-
Netherlands
-
Denmark
-
Finland
-
Norway
-
Sweden
-
Russia
-
Rest of Europe
-
-
Asia-Pacific
-
China
-
India
-
Japan
-
South Korea
-
Australia
-
Indonesia
-
Singapore
-
New Zealand
-
Rest of Asia-Pacific
-
-
RoW
-
Latin America
-
Middle East
-
Africa
-
Key Players
-
Affirm Holdings, Inc.
-
Atome
-
Afterpay Limited (Block, Inc.)
-
Klarna Bank AB (publ)
-
PayPal Holdings, Inc.
-
Zip Co Ltd.
-
Sezzle
-
Scalapay
-
Block, Inc.
-
Tabby FZ-LLC,
REPORT SCOPE AND SEGMENTATION:
|
Parameters |
Details |
|
Market Size in 2022 |
USD 112.17 Billion |
|
Revenue Forecast in 2030 |
USD 725.36 Billion |
|
Growth Rate |
CAGR of 22.2% from 2023 to 2030 |
|
Analysis Period |
2022–2030 |
|
Base Year Considered |
2021 |
|
Forecast Period |
2023–2030 |
|
Market Size Estimation |
Billion (USD) |
|
Growth Factors |
Rising trend of online shopping among consumers Increasing e-commerce platforms with online payment methods |
|
Countries Covered |
26 |
|
Companies Profiled |
15 |
|
Market Share |
Available for 10 companies |
|
Customization Scope |
Free customization (equivalent to up to 80 working hours of analysts) after purchase. Addition or alteration to country, regional, and segment scope. |
|
Pricing and Purchase Options |
Avail customized purchase options to meet your exact research needs. |
At Next Move Strategy Consulting, we understand that insightful market research is the cornerstone of successful business decisions. That's why we employ a robust and multifaceted approach, combining various methodologies to deliver the most accurate and actionable data for our clients.
Research Landscape
We navigate the world of research with two primary approaches:
Qualitative Approach
Our qualitative research methodologies involve immersive techniques such as in-depth interviews, focus groups, and observational studies. By engaging directly with individuals and stakeholders, we uncover valuable insights that quantitative data alone may overlook.
Quantitative Research
In tandem with qualitative methodologies, NMSC leverages the power of Quantitative Research to provide a robust foundation of numerical insights. Through systematic data collection and analysis, we quantify patterns, preferences, and market trends, offering a comprehensive view of the business landscape.
Our quantitative research approach employs diverse tools, including surveys, experiments, and statistical modelling. These methodologies enable us to gather data from a large and representative sample, ensuring the statistical significance of our findings. By employing structured questionnaires and standardized data collection methods, we guarantee the reliability and validity of the information we present to our clients.
Quantitative research is particularly effective in measuring the prevalence of trends, assessing market size, and gauging the impact of various factors on consumer behavior. The numerical precision attained through this approach equips our clients with actionable insights, facilitating data-driven decision-making and strategy formulation.
Our Specialized Toolbox for Industry-Specific Market Research
We deploy a specialized arsenal of techniques tailored to meet your unique requirements. Here's a glimpse into our comprehensive toolbox:
Information Procurement
The stage entails acquiring market data or relevant information through various sources and methodologies.
Market Research Approach
We utilize both top-down and bottom-up approaches in market research analysis to achieve a comprehensive understanding of the market dynamics, leveraging the broad perspective of industry trends and macroeconomic factors alongside detailed insights from specific segments and individual companies.
Porters Five Forces Analysis
We conduct Porter's Five Forces analysis to evaluate the competitive landscape of an industry, providing us with insights into factors that affect profitability and strategic positioning.
SWOT Analysis
We conduct SWOT analysis to understand market trends, identify potential threats, capitalize on opportunities, and assess our strengths and weaknesses.
Forecasting
We utilize a forecasting model to predict future consumption by considering parameters like population, economics, regulations, market competition, drivers, constraints, technology, and pricing. We also employ statistical techniques such as multilinear regression, exponential smoothing, moving average, ARIMA, and Monte Carlo simulations for accurate predictions. In econometric forecasting, we analyzed short-term and long-term event impacts, attributing values based on regulatory frameworks, economic factors, and market events.
Frequently Asked Questions
Download Free Sample
Speak to Our Analyst
Related Blogs
Insightful Review of Major Fintech Firms Influencing the Mobile Payment Market
The global mobile payment market is expected to grow annuall...
Role of Emerging Technologies in Shaping the Digital Marketplace Industry
Digital marketplaces act as intermediaries that facilitate t...
Navigating the Evolution of Distributed I/O Systems: Trends and Innovations
Introduction In today's rapidly evolving technologica...
