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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,
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.
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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,
The increasing adoption of AI technology to improve the real-time consumer base will propel the global market.
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.
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.
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,
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.
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.
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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,
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, 2022 (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 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,
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.
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,
An Infographic Representation of Buy Now Pay Later Market
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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.
ATTRIBUTE | DETAILS |
Study Period | 2019-2030 |
Base Year | 2022 |
Estimated Year | 2023 |
Forecast Period | 2023-2030 |
Historical Period | 2019-2021 |
Growth Rate | CAGR of 22.0% from 2023 to 2030 |
Unit | Value (USD billion) |
Segmentation | By Channel, Enterprise Type, Category, and Region |
By Channel |
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By Enterprise Type |
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By Category |
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By Region |
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The market is projected to reach USD 122.19 billion by 2030.
In 2022, the market was valued at USD 23.22 billion.
The market is projected to grow at a CAGR of 22.0% over the forecast period.
Online channel held the largest market share in 2022 and is growing at the highest CAGR during the forecast period.
Rising number of e-commerce platforms with online payment methods is one of the key drivers of market growth.
Asia Pacific is expected to grow with the fastest CAGR.
By category, consumer electronics captured a major market share.