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The global buy now pay later market size was valued at USD 15.91 billion in 2021. The market is projected to grow from USD 22.86 billion in 2022 to USD 90.51 billion by 2029, exhibiting a CAGR of 21.7% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market had exhibited a higher growth of 48.3% in 2020 compared to 2019.
In the scope of work, we have included services offered by companies such as Affirm Holdings, Inc., Perpay, Inc., Afterpay Limited, and PayPal Holdings Inc. The buy now pay later paypal offers four interest free payments through online payments system in the major countries. These leading players are offering services for various categories such as travel & tourism, consumer electronics, e-commerce & retail, healthcare insurance, and banking, financial services. This industry also uses buy now pay later flights, buy now pay later electronics offered by the leading players.
The increasing number of e-commerce platforms, and rising services adoption across millennials in developed countries, have propelled the buy now pay later market growth. According to Accenture plc, BNPL users have increased by 300% in the U.S. since 2018, with 45 million users in 2021, and their spending was valued at around USD 20.8 billion.
Further, several e-commerce companies across retail, banking and healthcare insurance sectors are adopting these services to facilitate their customers around the globe. Also, leading players in the market are investing in developing advanced BNPL applications and services. For instance,
Rising Consumer Preference towards Online Shopping to Boost Demand for Services
The impact of COVID-19 has resulted in staggering demand for services during the forecast period. The more than average growth is primarily attributed to the significant acceleration of the banking and healthcare insurance sector services. The buy now pay later market witnessed an enormous growth rate of 48.3% in 2020 as compared to 25.5% in 2019. This growth is attributed to surge in online shopping trend and rising e-commerce sale of the consumer electronics and retail products. According to United Nations Conference on Trade and Development (UNCTAD), the e-commerce sale of retail products increased from 16% to 19% in 2020. Also, rising online transactions during the pandemic situations have strengthen the demand for this services. According to UNCTAD, in 2020, UK observed spike in online transactions from 15.8% to 23.3% where as China’s online transactions increased from 20.7% to 24.9%. Similarly, the US online transactions increased from 11% to 14% in 2020.
Additionally, during the pandemic, consumers' online shopping preferences have been increased worldwide. The pandemic has shifted the customers towards online e-commerce platforms, which has driven several organizations to enter the online market. Several leading players have completed investment during the pandemic by adopting various business strategies, product launches, and partnerships. For instance,
Moreover, the revenue of the leading players have been increased during post pandemic which resulted in the rise in demand for services. For instance, in the last quarter of 2020, Affirm Holdings, Inc. recorded USD 2.70 billion revenue which was 55% additional as compared to 2019. This is primarily owing to surge in online active consumers. The huge shift towards online consumer resulted in high demand for the services.
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Rising Integration of Artificial Intelligence (A.I.) Technology with Apps to Augment Growth
Artificial intelligence (A.I.) and machine learning technology assist service providers in developing models in real-time and improving decision-making performance. Several players in the market are developing custom-built AI-based models to accelerate their consumer penetration in the market. For instance,
The increasing adoption of A.I. technology to improve the real-time consumer base will propel the global market trend.
Rising Number of E-commerce Platforms with Online Payments Methods is Accelerating Growth
The increasing adoption of online payment across industries such as banking, health insurance, retail & consumer goods, and others has propelled the global point of sale installment loans buy now pay later market growth. According to United Nations Conference on Trade and Development (UNCTAD), in 2020, more than 80% of consumers around the globe have shopped online, using digital payment. Also, rising e-commerce sales around the globe in 2021 created a massive demand for BNPL services. According to the Census Government Organization, in 2021, retail e-commerce sales in the third quarter of 2021 reached USD 204.6 billion in the U.S.
Additionally, according to the United Nations Conference on Trade and Development (UNCTAD) report, the global e-commerce sale through online platforms reached USD 26.7 trillion with an increase in retail sales, from 16% to 19% in 2020. Such an increase in e-commerce sales around the globe has created a huge opportunity for the market's growth during the forecast period.
Further, rising awareness about consumer electronic devices and health insurance services supports the growth. According to the Reserve Bank of Australia, in 2020, the buy now and pay later services transactions were valued at around USD 10 billion for purchases of goods in New Zealand and Australia. BNPL services transactions' value is rapidly increasing owing to a surge in demand for consumer electronic devices and health insurance services.
Lack of Awareness of Service and High Availability of Multiple Payment Options is Likely to Impede Growth
Multiple alternative options, such as financing payment over credit card and debit cards, postdated cheques, and others, are available. In several developing countries such as India, Brazil, Asian countries, and others, consumers and merchants are unaware of the BNPL service. Also, credit score needs to check before providing the BNPL service to the consumers.
The service offer bnpl easy payment options of monthly installments to the customers.This lack of awareness among the consumers, retailers, and merchants and the availability of multiple payment options hinders overall growth.
Rising Adoption of Online Ecommerce Application to Aid Growth of Market
The market is segmented into point of sale (POS) and online, based on channel.
The online market is expected to grow with the highest CAGR, owing to the adoption of e-commerce applications and the surge in online payment. According to Fortune Business Insights, the global online payment market was valued at around USD 3,286.52 billion in 2019 and is expected to grow with a CAGR of 23.7% during the forecast period of 2019-2027.
Leading players in the market are completing business strategies with renowned retail brands to boost online shopping. For instance,
Also, the point of sale is expected to grow with a steady CAGR in 2021 during the forecast period. This is primarily attributed to rising services adoption by brick-and-mortar traders.
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Rising Demand across Consumer Electronics, Banking and Health Insurance Sectors is expected to Fuel Growth
Based on the category, the market is divided into the BFSI, consumer electronics, fashion & garment, healthcare, retail, media and entertainment, and others.
Consumer electronics is expected to have the largest share in 2021, owing to a surge in online sales of consumer electronics such as smart T.V., smartphones, gaming consoles, and others. According to the India Brand Equity Foundation Organization, in 2020, India's consumer electronics and digital economy was valued at USD 537.50 billion in 2020 and is projected to reach USD 800 billion by 2030. The rise in the digital economy and adoption of consumer electronics is expected to create various opportunities for key players in the market.
BFSI is expected to grow with the highest CAGR owing to a surge in the adoption of services by the fintech and banking sectors. Key players in the market are launching advanced services by collaborating with the banking, financial services and insurance sector firms. For instance,
Further, healthcare is expected to have a significant CAGR due to the surge in adopting life and health insurance service. Several players are developing customized services for the healthcare sector. For instance,
North America Buy Now Pay Later Market Size, 2021 (USD Billion)
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The global market is segmented into five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America. They are further categorized into countries.
North America is expected to hold the largest buy now pay later market share owing to its rising investment in research and development activities and a vibrant start-up ecosystem. Increasing repeated consumers to use this service for purchasing products aid the buy now pay later market growth. The region's growth is due to the presence and investment did by key players such as Affirm Holdings, Inc., PayPal, Quadpay, Sezzle and others.
Asia Pacific region is expected to grow with the highest CAGR during the forecast period. This is primarily attributed to the increasing emergence of digital payments such as Amazon Pay, Google Pay, PayPal, and others. These online payments channel has created a massive demand for the service. Further, the increasing adoption of e-commerce online applications has created an unprecedented market opportunity for key players.
Europe is growing rapidly, owing to the surge in adopting the services among online shopping consumers. According to the World pay report, the buy now, pay later fintech business, such as Afterpay, Klarna, Affirm and others, in the U.K. is growing at 39% annually owing to a surge in e-commerce sales. Also, several leading are expanding their service offering in European countries such as Germany, the U.K., France and many others. For instance,
The Middle East and Africa are projected to grow significantly during the forecast period. This is primarily attributed to rising online shopping trends among consumers and a surge in digital payment acceptance by the people in the country.
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South America is expected to grow at a moderate pace during the forecast period. The buy now pay later market in the region is primarily driven by the increasing fintech company's investment and development of these services.
Key Players Are Developing and Expanding Their Services Offerings Worldwide
Buy now pay later companies are investing in advanced technologies such as A.I., cloud and machine learning to improve the capabilities of their services. Also, the major players in the buy now pay later market are involved in adopting various strategies such as mergers, acquisitions, collaborations, and partnerships, in expanding their market presence. For instance,
An Infographic Representation of Buy Now Pay Later Market
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The market report highlights leading regions worldwide to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry, share, growth, trends, research, overview and buy now pay later market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market. The report also includes growth, trends, research, overview and industry analysis.
Value (USD billion)
By Channel, Category, Region
The market is projected to reach USD 90.51 billion by 2029.
In 2021, the market was valued at USD 15.91 billion.
The market is projected to grow at a CAGR of 21.7%.
The online held the largest market share in 2021 and is growing the highest CAGR during the forecast period.
Asia Pacific region is expected to hold the highest market share.
Asia Pacific is expected to grow with the fastest CAGR.
North America is expected to hold a significant market share in the market. The market in this region was USD 10.02 billion in 2021.
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