Buy Now Pay Later Market Size, Share & COVID-19 Impact Analysis, By Channel (Point of Sale (POS) and Online), By Enterprise Type (SMEs and Large Enterprises), By Category (BFSI, Consumer Electronics, Fashion & Garment, Healthcare, Retail, Media and Entertainment, and Others), and Regional Forecast, 2023-2030

The global buy now pay later market size was valued at USD 23.22 billion in 2022 and is projected to grow from USD 30.38 billion in 2023 to USD 122.19 billion by 2030, exhibiting a CAGR of 22.0% during the forecast period.

In the scope of the report, 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 global buy now pay later market growth. According to Accenture plc, Buy Now Pay Later 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,

• In January 2022, Santander, Spanish Bank launched its BNPL application 'Zinnia' for the Europe market. Zinnia app helps consumers to purchase with monthly interest free installment payments across European countries.


• In September 2021, Coverpay launched its buy now, pay later service for the general insurance sector. The company received an investment of around USD 2.5 million. This product targets merchants for insurance services such as insurers, underwriting agencies, brokers, and authorized representatives.

COVID-19 IMPACT

Rising Consumer Preference toward Online Shopping Boosted Demand for Services

The impact of COVID-19 resulted in staggering demand for services during the pandemic period. The more than average growth is primarily attributed to the significant acceleration of the banking and healthcare insurance sector services. The global market witnessed an enormous growth rate of 48.3% in 2020 compared to 25.5% in 2019. This growth is attributed to surge in online shopping trends and rising e-commerce sales of consumer electronics and retail products. According to the 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 strengthened the demand for this service. According to UNCTAD, in 2020, the U.K. observed a spike in online transactions from 15.8% to 23.3% whereas China’s online transactions increased from 20.7% to 24.9%. Similarly, the U.S. online transactions increased from 11% to 14% in 2020.

LATEST TRENDS

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Rising Integration of Artificial Intelligence (AI) Technology in Apps to Augment Growth

Artificial Intelligence (AI) and machine learning technologies 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,

• In January 2022, Temenos, the banking software firm, launched an AI-based BNPL banking service within the Temenos Banking Cloud platform. The platform is based on AI technology that offers both consumers and merchant’s opportunities through alternative credit products.


• In February 2021, Credit Intelligence Limited partnered with the Sydney-based University of Technology to enhance AI capabilities. Credit Intelligence Limited acquired the YOZO fintech platform for adopting advanced technology AI for business expansion in several areas such as debt restructuring, debt collection, and debt factors in Australia and Asia. Credit Intelligence Limited aims to bring AI capabilities for buy now, pay later and financial management for small and medium enterprises.

The increasing adoption of AI technology to improve the real-time consumer base will propel the global market.

DRIVING FACTORS

Rising Number of E-commerce Platforms with Online Payment Methods is Accelerating Market Growth

The increasing adoption of online payment methods across industries such as banking, health insurance, retail & consumer goods, and others has propelled the global point of sale installment loans market growth. According to the 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 market 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.

RESTRAINING FACTORS

Lack of Awareness of Service and High Availability of Multiple Payment Options to Impede Growth

Multiple alternative options, such as financing payment over credit card and debit cards, postdated checks, 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 be checked before providing the BNPL service to the consumers.

The service offers 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.

SEGMENTATION

By Channel Analysis

Rising Adoption of Online Ecommerce Application to Aid Growth of Market

The market is bifurcated into Point of Sale (POS) and online, based on channel.

The online segment 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,

• January 2022 – Afterpay Limited partnered with several retailers such as Calvin Klein, Nordstrom, and Tommy Hilfiger. With this partnership, Afterpay Limited provides this service offering for these retailers' online and retail stores. This allowed the consumers to shop and use the buy now, pay later service.

Also, the point of sale segment is expected to grow with a steady CAGR in 2022 during the forecast period. This is primarily attributed to rising services adoption by brick-and-mortar traders.

By Enterprise Type Analysis

Large Enterprises to Lead the Segment Owing to High Adoption of the Product

Based on enterprise type, the market is classified into SMEs and large enterprises.

Large enterprises segment is anticipated to capture the highest market share by 2030, owing to growing adoption of buy now pay later technology in the e-commerce sector.

The SMEs segment is expected to grow with the highest CAGR during the forecast period, as it helps small businesses involved in transactions with distributors, suppliers, and aggregators. Further, it benefits SMEs in increasing cart conversion rate, save on merchant discount rate, and help them to increase their sales.

By Category Analysis

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Increasing Demand across Consumer Electronics, Banking and Health Insurance Sectors is expected to Fuel Growth

Based on category, the market is divided into the BFSI, consumer electronics, fashion & garment, healthcare, retail, media and entertainment, and others.

Consumer electronics segment held the largest part in the buy now pay later market share in 2022, 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,

• In July 2021: Afterpay, an Australia-based service provider, partnered with Westpac's financial services to enhance the digital capabilities in the banking services. Afterpay's money management platform allowed customers to access their spending through this strategic partnership.

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,

• In December 2021: SaveIN, a consumer credit fintech company, launched an offline point of sale installment loans product for the financing needed to manage healthcare expenses. The company calls this service care now pay later to provide service to the customers' physical point of care facilities.


• In October 2020: Max Life Insurance Company launched buy now, pay later service for its insurance customers. The service is applicable for life and health insurance policy purchases through online purchases. The customers can buy now and pay later through an online portal.

REGIONAL INSIGHTS

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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 market share, owing to its rising investment in research & development activities and a vibrant start-up ecosystem. Increasing repeated consumers to use this service for purchasing products aid the market growth. The region's growth is due to the presence and investment made by key players such as Affirm Holdings, Inc., PayPal, Quadpay, Sezzle, and others.

Asia Pacific 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 payment channels have 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 companies are expanding their service offering in European countries such as Germany, the U.K., France and many others. For instance,

• In January 2022, PayPal launched Pay in 30 Days buy now, pay later service in Germany. The service enables users to purchase up to USD 1,115.0 in 30 days without additional costs.

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.

South America is expected to grow at a moderate pace during the forecast period. The market in the region is primarily driven by the increasing fintech company's investment and development of these services.

• In December 2021: Kueski Mexico-based service provider had raised around USD 202.0 million in investment from Victory Park Capital and StepStone Group. The funding will expand its BNPL services offering across South American countries such as Mexico and Argentina.

KEY INDUSTRY PLAYERS

Key Players are Developing and Expanding their Service Offerings Globally

Buy now pay later companies are investing in advanced technologies such as AI, cloud, and machine learning to improve the capabilities of their services. Also, the major players in the market are involved in adopting various strategies such as mergers, acquisitions, collaborations, and partnerships, in expanding their market presence. For instance,

• January 2022 – Block, Inc. Technology Company for financial services acquired Afterpay Limited. This acquisition aims to provide Block, Inc. with enhanced financial services and products. It helped the company expand access for more consumers to drive revenue for all sellers and merchants.


• August 2021 – Affirm Holdings, Inc. and Apple, Inc. collaborated to launch PayBright "buy now, pay later" program for Apple's devices in Canada. The program allows people to use the point of sale installment loans service for Mac, iPhone, and iPads for 12 to 24 months.

List of Key Companies Profiled:

• Affirm Holdings Inc. (U.S.)


• Paypal (U.S.)


• Klarna Bank AB (publ) (Sweden)


• Laybuy Group Holdings Limited (New Zealand)


• Perpay Inc., (Philadelphia)


• Quadpay (U.S.)


• Sezzle (U.S.)


• Payl8r (U.K.)


• Splitit (U.S.)


• Billie (Germany)

KEY INDUSTRY DEVELOPMENTS:

• February 2023 – CRED launched an application CRED Flash to enter into the buy now pay later service. CRED Flash would enable users to make payments on the application and across over 500 partner merchants, including Urban Company, Zpto, and Swiggy. It allows users to clear the bill in 30 days at no charge.


• December 2022 – Galileo Financial Technologies, LLC., a financial technology company, launched a custom-made Buy Now Pay Later solution for fintechs and banks. This solution would help banks and fintechs to easily enter into the market and allow their customers for higher spending.


• July 2022 – Samsung introduced its buy now pay later option for the first time for its foldable smartphones including Galaxy Z Flip 3, Galaxy S22 series, and Galaxy Z Fold 3 series in India. This BNPL option would enable Samsung customers to pay 60% of the total bill in 18 interest free installments and the remaining 40% of the bill can be paid from the 19^th installment.


• January 2022 – Affirm Holdings Inc., a BNPL service provider for consumers, launched two significant product suites, Chrome browsers extension and Affirm SuperApp. SuperApp provides advanced BNPL options for payments, shopping, and financial services with one easy-to-use solution.


• December 2021 – Afterpay Limited partnered with Rakuten to get shopping rewards using the BNPL service. With this partnership, retailers and merchants can leverage the combined power of valuable shopping and payment methods. With this partnership, consumers can get cash back and incentives, and it will help shoppers relieve financial stress.

REPORT COVERAGE

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The 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.

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