Buy Now Pay Later Market Size, Share & Industry 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, 2024-2032

The global buy now pay later market size was valued at USD 30.38 billion in 2023 and is projected to grow from USD 37.19 billion in 2024 to USD 167.58 billion by 2032, exhibiting a CAGR of 20.7% during the forecast period. North America dominated the global market with a share of 59.94% in 2023.

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 (BNPL) 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. Furthermore, BNPL presents a substantial chance for growth as it aids banks in protecting their consumer finance and credit card sectors against emerging rivals. The U.S. Federal Reserve data reveals that credit card utilization presently stands at approximately 21%. If U.S. banks integrate BNPL into their credit cards, they have the potential to elevate customers' credit limits from USD 856 billion to USD 1.27 trillion by 2025.

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.

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. 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.

Buy Now Pay Later Market Trends

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 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.

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

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Buy Now Pay Later Market Growth 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. Also, rising e-commerce sales around the globe have created a massive demand for BNPL services. According to the Census Government Organization in 2023, retail e-commerce sales in the third quarter of 2023 reached USD 284.1 billion in the U.S.

Moreover, BNPL has shown to be a driving force in increasing conversion rates in the online shopping world. By providing flexible payment choices, e-commerce stores experience a rise in successful transactions. This has transformed how consumers behave, boosted conversion rates, broadened customer bases, given online retailers a competitive edge, and shaken up traditional consumer credit systems.

Further, rising awareness about consumer electronic devices and health insurance services supports the growth. The value of BNPL services transactions 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.

Buy Now Pay Later Market Segmentation Analysis

By Channel Analysis

Rising Adoption of Online E-commerce Applications 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. Many companies globally are forming partnerships to prioritize the implementation of various online payment methods, such as BNPL, as a key aspect of their recovery strategies after the pandemic.

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 the rising adoption of services 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. Many large-scale businesses, especially those with high average order values, are now providing BNPL choices to their clients to boost sales and customer loyalty. These large enterprises have the means to invest in cutting-edge technology and collaborate with top BNPL providers to offer smooth payment options. Additionally, they possess the financial stability and risk management tools to handle any potential losses from late payments or defaults.

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 its digital capabilities in 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 services. 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.

REGIONAL INSIGHTS

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.

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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 the adoption of 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 the 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.

List of Key Companies in Buy Now Pay Later Market

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, to expand 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.

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 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.


• May 2023 – ZestMoney announced that it plans to be profitable in 6 months. The fintech firm is said to be finalizing a new investment round from its existing shareholders, including Quona Capital, Zip, Omidyar Network India, Flourish VC, and Scarlet Digital. To ensure business continuity, ZestMoney plans to operate as a Lending Service Provider (LSP), partnering with banks and NBFCs to write out loans rather than lending directly from its balance sheet.


• February 2023 – India lifted the ban on PayU's LazyPay and some other lending apps. India's IT Ministry lifted the ban on seven high-profile lending apps, including PayU's LazyPay, Kissht, KreditBee, and Indiabulls' Home Loans, according to a person familiar with the matter, providing some relief to the fintech industry that has been reeling with immense scrutiny in recent quarters.

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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