Buy Now Pay Later Market Size
Buy Now, Pay Later The market was worth $378.3 billion in 2023, and it is predicted to increase at a rate of more than 40% per year from 2024 to 2032. This is because consumers want more flexible payment alternatives. People today, especially Millennials and Generation Z, want payment choices that provide them more freedom and control over their money. With BNPL services, customers may break up their purchases into smaller, easier-to-manage payments. This is different from regular credit cards, which might have high interest rates and tight payback plans.
"Buy now, pay later" (BNPL) is a game-changer for significant purchases. Instead of paying a big amount all at once, BNPL enables you spread out the payments, which makes it easier to buy the things you want. Also, it's really simple to use BNPL services. You won't have to deal with a lot of paperwork or complicated phrases because they usually have straightforward terms and not a lot of paperwork. And because more and more people are shopping online, BNPL alternatives are now available directly at checkout, making it even easier to get what you want without spending a lot of money. The market for these services is growing quickly because more and more individuals want to be able to pay in different ways, like BNPL. It's making shopping easier, lowering the amount of individuals who leave their carts at checkout, and raising sales overall.
| Report Attribute | Details |
|---|---|
| Base Year | 2023 |
| Buy Now Pay Later Market Size in 2023 | USD 378.3 Billion |
| Forecast Period | 2024 - 2032 |
| Forecast Period 2024 - 2032 CAGR | 40% |
| 2032 Value Projection | USD 8 Trillion |
| Historical Data for | 2021 – 2023 |
| No. of Pages | 210 |
| Tables, Charts & Figures | 218 |
| Segments covered | Enterprise size, channel, end use, region |
| Growth Drivers |
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| Pitfalls & Challenges |
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For example, in March 2024, BNPL companies started to advertise their services to a larger audience. In 2024, millennials started using BNPL more than anyone from preceding generations. Millennials, who are particularly good with technology, have also adopted digital payment methods like mobile wallets. In 2024, more than any other generation, close to 45 million millennials will use proximity mobile payments.
Another important reason for the market's growth is that BNPL services have lower fees and interest rates than regular credit cards. People who use traditional credit cards sometimes end up with a lot of debt because they have high interest rates on revolving balances, yearly fees, and other expenditures that aren't always clear. On the other hand, many BNPL companies either charge very little for their services or provide payment plans with no interest if the payments are done on time. This makes BNPL a good choice for consumers who want to keep better track of their expenditure without paying excessive interest rates.
BNPL services are even more appealing because they have clear pricing schedules and no extra costs. Customers like BNPL because it is easy to use and reliable. This helps them avoid the money problems that come with using traditional credit products. More people are choosing BNPL solutions because they are more cost-effective than other options. This is helping the buy now pay later business develop.
Consumer debt risk is a big problem for the BNPL company since it makes things hard for both BNPL suppliers and clients. Because BNPL products are easy to get and let customers make a lot of purchases without having to worry about their money right away, they may wind up with more debt than they can handle. People who don't know much about finance or don't fully understand the terms and conditions of their BNPL agreements should be especially worried about this.
If customers don't pay their installments on time, they may have to pay late fees and penalties, which could make their financial situation worse. Unlike typical credit products, BNPL services may not always require comprehensive credit checks. This means that persons with negative credit or low incomes may find it easier to get credit.
Buy Now Pay Later Market Trends
One important change in the BNPL arena is that it is becoming more and more integrated with online shopping carts. As more and more people buy things online, BNPL services are becoming more and more common as a way to pay at the point of sale. BNPL companies are working with big online stores like Amazon, Shopify, and others to offer simple, integrated financing alternatives.
This integration not only makes shopping easier by giving customers more ways to pay, but it also helps companies reduce cart abandonment and boost conversion rates. BNPL is a great solution for customers who want interest-free financing without any effort because it is easy to use and available right away at the point of sale.
BNPL services are now moving into other areas, including as home improvement, healthcare, travel, and education, after becoming well-known in the retail industry. BNPL suppliers can reach new markets and make more money by diversifying. For example, BNPL lets consumers pay for medical procedures and treatments, which makes it easier for them to get health care. The tourism industry also employs BNPL to accommodate the high demand for travel during the outbreak. This lets clients plan trips and pay for them over time..
In the same way, BNPL services help students and their parents keep track of the costs of tuition and other school-related expenses. This move into other industries shows how flexible BNPL solutions are and how popular they are becoming in numerous market niches.
As the "buy now, pay later" (BNPL) sector grows, regulators are stepping in to protect customers from possible risks. They're making standards to make sure that BNPL companies are honest and put their customers first. These rules could require that providersCarefully check to see if clients can pay their bills Make the terms of their loans very clear Stop people from borrowing too much money. These rules are very important for the future of the BNPL market. They'll make sure that suppliers keep customers safe while letting the business grow.
Buy Now Pay Later Market Analysis
Based on enterprise size, the market is divided into Small and Medium Enterprises (SMEs) and large enterprises. The large enterprise segment is expected to register a CAGR of 45% during the forecast period.
- Large farms can achieve efficient integration and promotion of BNPL services, utilizing their considerable resources and presence. These businesses often adopt BNPL solutions as they have a large consumer base and a significant online and physical presence.
- Along with various payment options that appeal to a wide range of consumer types, big businesses can improve their value proposition by collaborating with BNPL suppliers. This results in increased sales volumes and higher average transaction, along with improved customer happiness and loyalty. When it comes to staying competitive in the ever-changing retail scene, large organizations use BNPL services as part of a larger plan to reinvent their payment systems.
- Furthermore, major businesses can further optimize their integration of BNPL services by negotiating better conditions, such as lower transaction costs or unique features, with BNPL providers owing to their increased bargaining strength. Large companies' adoption of BNPL also creates a precedent in the market, inspiring smaller companies to do the same and fostering the expansion of the BNPL ecosystem as a whole.
Based on channel, the buy now pay later market is divided into Point of Sale (POS) and offline. The POS segment dominated the global market with a revenue of over USD 5 trillion in 2032.
- The POS segment focuses on offering BNPL services right at the checkout in both brick-and-mortar stores and online venues. With instant financial relief and a higher chance of transaction completion, the integration of BNPL alternatives at the POS gives customers access to flexible payment plans, greatly improving their shopping experience.
- Customers can divide their payments into reasonable instalments in physical locations without a credit card or a drawn-out application process owing to BNPL solutions at the POS. Customers may be more satisfied and loyal due to the flexibility and ease of completion of purchases. Higher-ticket items can be made more affordable for a wider spectrum of customers with BNPL choices, which benefits retailers by increasing sales and decreasing cart abandonment.
- The ability of clients to select a BNPL plan at the checkout page can greatly lessen the friction and hesitancy that come with major or unforeseen costs. During the checkout process, when customers are most sensitive to price and payment flexibility, this seamless connection is especially enticing. Online shops can raise average order values, draw in more people, and improve conversion rates by providing BNPL solutions.
North America dominated the global buy now pay later market in 2023, accounting for a share of over 30%. This region is seeing rapid expansion and widespread adoption of BNPL services, making it an attractive and dynamic market for BNPL providers.
Consumers in North America are looking for flexible payment options to better manage their money, particularly Millennials and Gen Z. The BNPL model has been widely adopted due to its interest-free installment plans and compatibility with these groups' financial inclinations. In addition, North America has one of the biggest and most developed e-commerce markets. The COVID-19 pandemic further spiked e-commerce, creating a favorable environment for BNPL services. Large regional businesses and e-commerce sites in the region have included BNPL options to improve customer experience, lower cart abandonment rates, and boost sales.
The BNPL market in the U.S. is expanding quickly due to the high demand from consumers for flexible payment choices. American customers are using BNPL services increasingly, especially the younger generation, to control their spending instead of paying exorbitant interest rates on traditional credit cards. The BNPL providers in the U.S. are utilizing advanced technologies to create smooth and easy-to-use experiences. Fintech innovations, such as safe payment processing and real-time credit assessments, fuel the adoption of BNPL services among customers.
For instance, in November 2023, the perception of inflation among American consumers started to improve, and their purchasing power gradually started to rise again. However, optimism notwithstanding, the financial well-being of consumers might not be as it looks. Furthermore, because of the use of BNPL, customers might be understating their debt. A true assessment of the outstanding debt of American consumers is challenging to compute because many BNPL lenders do not submit their data to credit reporting organizations.
Buy Now, Pay Later (BNPL) services are gaining steam in Japan, where consumers have traditionally been cautious about credit. These services offer flexible payment options that appeal to the convenience-seeking nature of Japanese shoppers. One major factor driving BNPL adoption in Japan is its integration with e-commerce platforms. To cater to tech-savvy customers, major online stores and marketplaces are embracing BNPL solutions, seeing them as a way to boost sales. Japan's advanced technology infrastructure has also paved the way for BNPL growth. Providers are leveraging cutting-edge technology to offer secure, convenient, and user-friendly payment options that align with the tech-savvy preferences of Japanese consumers.
In South Korea, people love tapping and swiping their way through life. They're crazy about digital payments, so it's no wonder they've embraced "Buy Now, Pay Later" (BNPL) services like it's the latest K-pop hit. Why? Well, South Koreans are pros at online shopping, so switching to BNPL was as easy as clicking a button. And the younger crowd, always looking for ways to live flexibly, has become the driving force behind BNPL's popularity. They'd rather pay in smaller chunks than swipe their credit cards. But as BNPL booms, South Korean authorities are keeping a watchful eye to protect consumers and keep the financial system stable. So, businesses offering these services need to follow the rules as they change. That's the key to staying ahead of the game and keeping customers smiling.
You know how China has a massive number of people who love technology? Well, they're really into a new way to pay called BNPL (Buy Now, Pay Later). It's like a credit card, but it's more digital and flexible. In China, BNPL is taking off like wildfire. You can use it to buy things online or in stores. Even bigwigs like Alibaba and JD.com, the giants of online shopping, are jumping on the BNPL bandwagon. They're adding BNPL options to their platforms to make shopping easier and more convenient for their customers. Plus, they're making more money from all the fees. But hold your horses! The Chinese government is keeping a close eye on this BNPL craze. They want to make sure people aren't getting into too much debt and that the whole financial system stays stable. This could mean some changes in the way BNPL works in China in the future.
In conclusion, the buy now pay later (BNPL) market is driven by consumer preferences, technology improvements, e-commerce integration, and regulatory environments, and is present in the U.S., Japan, South Korea, and China at different degrees of acceptance. With the goal of increasing their footprint and gaining market share, BNPL providers face different opportunities and difficulties in every location.
Buy Now Pay Later Market Share
Klarna Inc. & Afterpay Limited hold a significant share of over 35% in the BNPL industry. Klarna Inc.'s innovative consumer finance methodology and global reach have enabled the company to occupy a considerable stake in the market. Since its founding in Sweden in 2005, Klarna has grown quickly to become one of the leading providers of business-to-business loans, catering to millions of customers globally. The reason behind the company’s success is its easy-to-use platform, which provides a smooth and adaptable buying experience.
Customers have clear terms, no hidden costs, and the option to pay now, later, or in instalments. Klarna's acceptance and awareness have increased owing to its strategic relationships with large online and offline merchants. The company has gained a significant market share owing to its strong brand recognition, emphasis on client satisfaction, and creative financial solutions.
Similarly, Afterpay Limited has made a big impact in the BNPL space, especially in Australia, where it was founded, as well as in the U.S., the UK, and other foreign markets.
Offering interest-free installment plans is the foundation of Afterpay's business model, which was established in 2014 and makes it a desirable choice for customers looking to avoid the typical credit card interest rates and fees. The company has seen rapid development with a particular emphasis on the millennial and Gen Z groups, who are lured to the financial flexibility and simple repayment terms. Owing to its diverse range of retail alliances, the brand can be widely adopted at checkout points, both online and in real stores.
Buy Now Pay Later Market Companies
Major players operating in the BNPL industry are
- Klarna Inc.
- Afterpay Limited
- Affirm Holdings Inc.
- PayPal Holdings Inc.
- Sezzle
- Splitit Payments Ltd.
- Zip Co, Ltd.
Buy Now Pay Later Industry News
- In February 2022, CRED launched the CRED Flash application to enter the BNPL industry. Users of CRED Flash can pay using the app and across over 500 partner retailers, including Swiggy, Zepto, and Urban Company. Customers can pay their invoices for free within 30 days.
- In September 2023, the fintech industry witnessed a significant transformation with the emergence of ‘Buy Now Pay Later (BNPL)’, a form of short-term financing that enables consumers to make immediate purchases and settle payments over a predetermined period. However, each BNPL program comes with distinct prerequisites that patrons must fulfil. In recent years, the landscape has shifted from catering solely to a specialized consumer segment to emerging as one of the foremost payment mechanisms, fueled by digitalization, e-commerce expansion, credit card rate hikes, and popularity among younger demographics.
The buy now pay later (BNPL) market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2021 to 2032, for the following segments
Market, By Enterprise Size
- Small and Medium enterprises (SMEs)
- Large enterprises
Market, By Channel
- Point of Sale (POS)
- Offline
Market, By End Use
- Retail
- Consumer electronics
- Fashion & garment
- Others
- Healthcare
- Leisure & entertainment
- Automotive
- Others
- Home improvement
- Education
Market, By Customer
- Gen Z (21-25)
- Millennials (26-40)
- Gen X (41-45)
- Baby Boomers (56-75)
The above information is provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- Germany
- UK
- France
- Italy
- Spain
- Rest of Europe
- Asia Pacific
- China
- India
- Japan
- South Korea
- ANZ
- Rest of Asia Pacific
- Latin America
- Brazil
- Mexico
- Rest of Latin America
- MEA
- UAE
- Saudi Arabia
- South Africa
- Rest of MEA
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