Consumer Behaviour In The Buy Now Pay Later Market Insights And Trends Report To 2030

Buy Now Pay Later Industry Overview

The global buy now pay later market size was estimated at USD 6.13 billion in 2022 and is anticipated to grow at a compound annual growth rate (CAGR) of 26.1% from 2023 to 2030. The global buy now pay later (BNPL) transactions were estimated at over USD 200 billion in 2022. One of the main drivers is the aggregate preference among consumers for supple and suitable payment options. BNPL services enable customers to make purchases without immediate payment, providing greater financial flexibility and ease of burden from upfront charges. The increase in e-commerce has also played a significant role in driving the BNPL market’s growth. Consumers seek seamless and efficient payment methods as online shopping becomes more predominant. BNPL services integrate seamlessly into online checkout processes, enabling a swift and hassle-free payment experience. With the growth of e-commerce platforms and the widespread adoption of digital wallets, BNPL solutions have become an attractive option for both customers and merchants alike.

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BNPL services address the challenge of affordability for customers. With the ability to split payments into interest-free installments, BNPL providers allow consumers to make larger purchases without facing financial strain. This has led to increased average order values and repeat business for merchants as customers feel more comfortable making substantial purchases. Moreover, the accessibility and ease of signing up for BNPL services have contributed to their popularity. Most BNPL platforms offer quick and straightforward registration processes, often requiring minimal credit checks. This inclusivity appeals to a broader consumer base, including individuals with limited credit history or lower credit scores, who may face challenges obtaining traditional credit.

In addition to consumer benefits, BNPL providers offer attractive partnerships and incentives to merchants. By partnering with BNPL platforms, retailers can attract new customers, enhance customer loyalty, and increase conversion rates. BNPL services also help merchants reduce cart abandonment rates by providing an alternative payment option encouraging customers to complete their purchases. Regulatory support and evolving payment regulations have also positively influenced the BNPL market. Governments and financial regulators in various countries have recognized BNPL services as a legitimate payment method, providing greater legitimacy and consumer confidence. This regulatory backing has encouraged BNPL providers to expand their services and explore new markets, contributing to the industry's growth.

A potential restraint in the BNPL market is the risk of increased consumer debt. As the popularity of BNPL services grows, there is a concern that consumers may become tempted to overspend, leading to a build-up of debt that could become unmanageable. To overcome this restraint and ensure responsible lending practices, BNPL providers should implement strict credit checks and assess each customer's creditworthiness before offering their services. In addition, educational initiatives and clear communication about the terms and conditions of BNPL options can empower consumers to make informed financial decisions and avoid excessive debt.

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Key Companies profiled:

• Affirm, Inc.

• Klarna Inc.

• Splitit Payments, Ltd.

• Sezzle

• Perpay Inc.

• Zip Co, Ltd

• PayPal Holdings, Inc.

• AfterPay Limited

• Openpay

• LatitudePay Financial Services

• HSBC Group