Buy Now Pay Later Market Forecasts to 2030 - Global Analysis By Component, Purchase Ticket Size, Business Model, Mode, Enterprise Size, Application, End User and By Geography

According to Stratistics MRC, the Global Buy Now Pay Later Market is accounted for $28.83 billion in 2023 and is expected to reach $131.47 billion by 2030 growing at a CAGR of 24.2% during the forecast period. The Buy now pay later (BNPL) is a financial service sector that allows consumers to make purchases and defer payment for them over time. It provides an alternative to traditional credit cards and installment loans, offering flexibility and convenience to consumers. With BNPL, customers can split their payments into interest-free installments, making it an attractive option for budget-conscious shoppers. Online retailers and brick-and-mortar stores alike are increasingly integrating BNPL options into their checkout processes to enhance the customer shopping experience and drive higher conversion rates.

According to the Bank of America Corp., the market for these BNPL payment apps is expected to grow 10-15 times by 2025

Market Dynamics:

Driver:

Rise in artificial intelligence (A.I.) technology integration

The development of models in real-time and improved decision-making are made possible by machine learning and artificial intelligence (A.I.) technologies. To speed up consumer market penetration, a number of industry players are developing specialized AI-based models. For instance, in January 2022, Temenos, a provider of banking software, unveiled a BNPL banking service powered by AI within its Temenos Banking Cloud platform. The platform is based on artificial intelligence (A.I.) technology and provides opportunities through alternative credit options for clients and merchants. As A.I. technology is increasingly used to expand the real-time customer base, this trend will be driven by the worldwide market.

Restraint:

Lack of awareness of service

While BNPL offers consumers the convenience of deferred payment for purchases, many potential users remain unaware of its availability or the benefits it offers. Limited knowledge about the service's terms and conditions, fees, and potential risks may deter potential customers from adopting BNPL options. Furthermore, concerns about accumulating debt and potential impact on credit scores may deter individuals from using BNPL, especially if they are not adequately informed about responsible usage. Addressing this lack of awareness through educational initiatives and transparent communication is crucial for the BNPL market to realize its full potential and attract a broader user base.

Opportunity:

Rising adoption of online ecommerce application

As e-commerce continues to grow, consumers seek flexible and convenient payment options, making BNPL services an attractive proposition. With the shift towards digital shopping platforms, BNPL providers can integrate their services seamlessly, offering consumers the choice to split their payments over installments, easing the burden of upfront costs. The convenience and simplicity of BNPL appeal to a broader customer base, driving higher adoption rates. As online shopping becomes increasingly prevalent, BNPL providers have the chance to expand their services and tap into the growing e-commerce market, elevating the overall growth and success of the BNPL industry.

Threat:

High late fee charges

While BNPL services offer convenient and flexible payment options, customers risk accumulating additional costs if they fail to meet payment deadlines. Exorbitant late fees can deter users from utilizing BNPL, as the fear of incurring substantial penalties may outweigh the benefits of deferred payment. To address this concern, BNPL providers must strike a balance between ensuring timely payments and offering reasonable late fee structures. Implementing transparent and fair late fee policies can build trust with customers, encouraging wider adoption of BNPL services and promoting responsible usage in the market.

COVID-19 Impact:

The COVID-19 pandemic has had a positive impact on the market. The global economic crisis has reduced household incomes, increasing the need for liquidity, which is predicted to last through 2022. Consumer confidence in using different online payment methods to buy things has been fuelled by the pandemic and has created a new norm for online shopping. Amid addition, amid difficult economic conditions banks frequently refrain from extending credit. In these situations, BNPL's solutions assist clients in making recurring payments on their invoices. The COVID-19 pandemic has consequently led to a considerable increase in BNPL transactions.

The travel & accommodation segment is expected to be the largest during the forecast period

The travel & accommodation segment held the largest share in the market owing to the increasing demand as their services are now extended beyond retail purchases to include vacation expenses such as flights, hotels, and tours. By offering deferred payment options for travel and accommodation, BNPL providers cater to consumers' desire for flexible and budget-friendly vacation planning. This enables travelers to book their dream trips without the need for immediate full payment, making travel more accessible and affordable. With the rising popularity of travel and the convenience of BNPL, this segment has seen substantial growth, empowering travelers to explore new destinations and experiences while managing their expenses responsibly.

The online segment is expected to have the highest CAGR during the forecast period

During the projection period, the online segment is expected to have the greatest CAGR. Online shopping's surging popularity has propelled the adoption of BNPL services, with digital retailers seamlessly integrating these payment options into their checkout processes. Customers appreciate the convenience and flexibility of BNPL, allowing them to make purchases without immediate full payment, making it an attractive choice for various goods and services. Furthermore, the online nature of BNPL ensures quick and easy application processes, instant approvals, and prompt transactions, enhancing the overall user experience. As e-commerce continues to thrive, BNPL's online presence provides a robust and promising landscape for the market's growth and expansion.

Region with largest share:

The North America region market is estimated to witness the highest share of the global Buy Now Pay Later market during the forecast period. With a mature e-commerce landscape and a large consumer base, BNPL services have gained significant traction. Online retailers and brick-and-mortar stores alike are integrating BNPL options into their checkout processes to offer customers a convenient and flexible payment alternative. The region's tech-savvy population values seamless digital experiences, making BNPL an appealing choice for a wide range of purchases. Additionally, BNPL providers in North America focus on building trust and loyalty by offering transparent and reasonable fee structures. As the BNPL market continues to evolve, North America remains at the forefront of its expansion and innovation.

Region with highest CAGR:

The Asia Pacific region is expected to have the highest growth rate over the forecast period. The region's expanding middle class, rising disposable incomes, and increasing digitalization have contributed to the surge in online shopping and e-commerce platforms, creating a favorable environment for BNPL services. As consumers seek flexible and convenient payment options, BNPL providers have capitalized on the region's booming e-commerce market, integrating their services with various online retailers and payment gateways. The accessibility and ease of BNPL options resonate well with the tech-savvy population in Asia Pacific, offering a promising opportunity for BNPL companies to establish a strong foothold in this fast-growing and dynamic market.

Key players in the market:

Some of the key players in Buy Now Pay Later market include: Affirm Holdings Inc., Afterpay, Billie, Klarna Bank AB, Klarna Inc., LatitudePay, Laybuy Group Holdings Limited, Openpay, Paylater, PayPal Holdings Inc., Perpay Inc., Quadpay, Inc., Sezzle and Splitit.

Key Developments:

In March 2022, Temenos 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, 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

Components Covered:

• Platform/Solutions
• Services

Purchase Ticket Sizes Covered:

• Small Ticket Item (Up to US$ 300)
• Mid Ticket Items (US$ 300 - US$ 1000)
• Higher Prime Segments (Above US$ 1000)

Business Models Covered:

• Customer Driven
• Business Driven

Modes Covered:

• Online
• Point of Sale (PoS)

Enterprise Sizes Covered:

• Large Enterprises
• Small & Medium Enterprises

Applications Covered:

• Banking, Financial Services and Insurance (BFSI)
• Furniture
• Electrical Goods & Home Appliances
• Clothing & Footwear
• Sports & Fitness Equipment
• Travel & Accommodation
• Media & Entertainment
• Health & Beauty
• Food & Drink
• Other Applications

End Users Covered:

• Generation X
• Generation Z/Millennials
• Baby Boomers
• Other End Users

Regions Covered:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • Italy
  • France
  • Spain
  • Rest of Europe
• Asia Pacific
  • Japan
  • China
  • India
  • Australia
  • New Zealand
  • South Korea
  • Rest of Asia Pacific
• South America
  • Argentina
  • Brazil
  • Chile
  • Rest of South America
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Qatar
  • South Africa
  • Rest of Middle East & Africa

What our report offers:

• Market share assessments for the regional and country-level segments
• Strategic recommendations for the new entrants
• Covers Market data for the years 2021, 2022, 2023, 2026, and 2030
• Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
• Strategic recommendations in key business segments based on the market estimations
• Competitive landscaping mapping the key common trends
• Company profiling with detailed strategies, financials, and recent developments
• Supply chain trends mapping the latest technological advancements

Free Customization Offerings:

All the customers of this report will be entitled to receive one of the following free customization options:

• Company Profiling
  • Comprehensive profiling of additional market players (up to 3)
  • SWOT Analysis of key players (up to 3)
• Regional Segmentation
  • Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
  • Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances