Global Buy Now Pay Later Market By Channel (Online and Point Of Sale (POS)), By Enterprise Size (Large Enterprises and Small & Medium Enterprises), By End User (Banking, Financial Services & Insurance (BFSI), Consumer Electronics, Fashion & Garment, Healthcare, Leisure & Entertainment, Retail, and Other End-Users), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

The global Buy Now Pay Later Market is estimated to be worth USD 16 Billion in 2023 and may attain USD 115 Billion by 2032. During the projected period, the buy now pay later industry is anticipated to witness a CAGR of 25.3%.

The buy now pay later option helps consumers purchase online or in-store without making complete payments. Factors like digitization, increasing merchant adoption, and repeat usage by younger consumers are surging the market. Younger consumers benefit from paying for stationery products for buying high-cost products like laptops, smartphones, smart TV, etc. BNPL services offer a fixed payment schedule, a simplified checkout process, zero interest, and fast approval options to customers looking to make purchases. Consumers across the globe use BNPL services to avoid paying credit card interest, make purchases that don’t fit in their budget, and borrow money without a credit check.

Key Takeaways

• Market Growth: The global Buy Now Pay Later Market (BNPL) market is rapidly growing, with a projected CAGR of 25.3% from 2023 to 2032.
• Channel Analysis: Online is by far the most lucrative buy now pay later market segment worldwide, accounting for 62% of all global revenues generated.
• Enterprise Size Analysis: According to estimates, large enterprises represent one of the most attractive segments within the global buy now pay later market with over 61% market share in 2022.
• End-User Analysis: Retail is estimated to be the most lucrative end-use segment within the global buy now pay later market, accounting for more than 71.3 % of revenue over its projected period.
• Drivers: E-commerce growth and digital payments adoption remain major drivers.
• Restraints: BNPL services allow consumers to easily overspend, as they do not have to cover the total costs upfront of purchases they make with them.
• Challenges: With new entrants entering the market regularly, competition for BNPL providers could increase exponentially and make maintaining profitability increasingly challenging.
• Opportunities: With many emerging markets still experiencing minimal penetration of BNPL services, providers of such products see an opportunity to enter new markets and expand customer bases.
• Regional Analysis: As of 2022, North America held the greatest market share and contributed approximately 32% to global revenue.
• Top Key Players: Affirm, Inc., Afterpay Pty Ltd, Atome, Flipkart Internet Private Limited, Grab Holdings Inc., Hoolah Holdings Pte Ltd., Klarna Inc., LatitudePay Australia Pty Ltd, Laybuy Group Holdings Limited., Mastercard International Incorporated, Monzo Bank Limited, One97 Communications Limited (Paytm), Openpay Pty Ltd., Payl8r (Social Money Ltd.), PayPal Holdings, Inc., Perpay Inc., Sezzle Inc, SPLITIT USA INC., Zip Co Limited, Other Key Players

Channel Analysis

Based on the channel, the buy now pay later market is segmented into Online, Point of Sale(POS). Among these, the Online segment is the most lucrative in the global buy now pay later market, with more than 62% of global revenue. Many businesses are forming partnerships as per the post-pandemic resurgence plan to focus on adopting fast-growing online methods like buy now pay later.

The POS channel is expected to grow during the forecast period. To enhance customer experience and strengthen customer relationships, many businesses focus on financing options like POS BNPL. Also, companies provide programs for transparent PoS installment loans based on customer loyalty. As a result, more and more customers are returning to businesses.

Enterprise Size Analysis

The market is further divided by Enterprise size into large enterprises, small & medium enterprises. The large enterprise segment is estimated to be the most lucrative segment in the global buy now pay later market, with a market share of more than 61% in 2022. As BNPL offers a flexible and affordable payment method for buying high-cost products, it is widely adopted by large enterprises. Thus, it helps improve customer services for large enterprises. To help merchants improve sales conversion rates, Small & medium enterprises are working on it.

End-User Analysis

Based on end-user, the market is segmented into Banking, Financial Services & Insurance (BFSI), Consumer Electronics, Fashion & Garment, Healthcare, Leisure & Entertainment, Retail, and Other End-Users. Among these end-users, the retail segment is estimated to be the most lucrative segment in the global buy now pay later market, with the largest revenue share of more than 71.3% during the forecast period.

There is an increase in buy now pay later adoption as it allows customers to easily distribute the purchase cost over pre-determined time and interest-free payments. The healthcare segment is expected to register a promising CAGR over the forecast period. As a low-friction alternative to credit cards, BNPL payment methods are being increasingly adopted in the industry. Customers prefer to pay with BNPL rather than credit cards to avoid costly hidden fees and compounding interest.

In addition, the demand for buy now, pay later services is expected to be driven by the rising costs of treating several diseases, such as cancer, chronic heart disease, and cardiovascular diseases, during the forecast period.

Key Market Segments

Based on Channel

• Online
• Point of Sale

Based on Enterprise Size

• Large Enterprises
• Small & Medium Enterprises

Based on End-User

• Banking, Financial Services & Insurance (BFSI)
• Consumer Electronics
• Fashion & Garment
• Healthcare
• Leisure & Entertainment
• Retail
• Other End-Users

Drivers

The Rising Number of E-commerce Platforms with Online Payments Methods is Accelerating Growth

The global point-of-sale installment loans buy now pay later market has expanded due to the growing use of online payment methods in various sectors, including banking, health insurance, retail, and consumer goods.

The United Nations Conference on Trade and Development (UNCTAD) states that over 80% of consumers worldwide have used digital payment online shopping. Additionally, there was significant demand for BNPL services due to rising global e-commerce sales.

Restraints

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

Many other alternatives include financing payment with credit or debit cards, postdated cheques, and others. The BNPL service is unknown to consumers and businesses in many developing nations, including India, Brazil, Asian nations, and others. Before offering BNPL to customers, credit scores must also be checked.

Customers can take advantage of the service’s simple monthly installment payment options. The availability of multiple payment options and the general lack of awareness among consumers, retailers, and merchants impede growth.

Opportunity

Affordable and Convenient Payment Service of Buy Now Pay Later Platforms

The growth of the buy now pay later market is driven by the fact that the method of payment known as buy now pay later provides individuals with some advantages, one of which is the availability of instant credit card fund transfer service at the point of sale platform and affordable and convenient payment services.

The buy now, pay later platform supports a QR-code option that enables individuals to scan a code to make a payment and facilitates transactions using UPI methods, both of which contribute to the market’s expansion. The buy now, pay later platform enables customers to make secure payments without having to swipe their debit cards, which contributes to the global expansion of the market.

The buy now, pay later platform’s significant advantages, including digitally monitoring transaction details, reminding customers to make their payments, and raising their credit score, have sped up the global market’s expansion. The buy now, pay later payment technology platform is widely adopted by retailers and businesses due to the company’s increased revenue from selling lower-priced products at higher rates and offering an installment repayment option.

Trends

BNPL services have gained widespread adoption in the e-commerce sector. Major online retailers and marketplaces have started integrating BNPL options at checkout, making it easier for customers to finance their purchases. This integration has contributed to the market’s growth and expanded its user base.

Additionally, the younger generations, such as Millennials and Gen Z, have been key drivers of the BNPL market. These demographic groups have preferred digital and flexible payment options, and BNPL aligns with their needs and financial habits. The simplicity and transparency of BNPL services have made them popular among younger consumers.

Regional Analysis

In 2022, North America dominated the market and contributed approximately 32% of global revenue. The presence of many prominent players can be due to factors like regional market expansion. A number of fintech companies in this region are collaborating with entertainment companies to provide BNPL services for hotel reservations.

Over the forecast period, Asia-Pacific is anticipated to experience the fastest CAGR. Because it enables customers to access credit and postpone payments, the BNPL trend is gaining traction across the region. Millennial and Gen Z customers have contributed to the region’s increased adoption of BNPL solutions. Over the forecast period, the region’s expanding mobile internet penetration is also anticipated to provide growth opportunities for the regional market.

Key Regions and Countries Covered in this Report:

• North America
  • The US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia
  • Netherland
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • New Zealand
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

Emerging key players are focused on various strategic policies to develop their respective businesses in foreign markets. Several buy now pay later market companies are concentrating on expanding their existing operations and R&D facilities. Furthermore, businesses in the buy now pay later market are developing new products and portfolio expansion strategies through investments, mergers, and acquisitions. In addition, several key players are now focusing on different marketing strategies, such as spreading awareness to boost the target products’ growth.

With the presence of many local and regional players, the market for buy now pay later is fragmented. Market players are subject to intense competition from top players, particularly those with strong brand recognition and high distribution networks. Companies have gained various expansion strategies, such as partnerships and product launches, to stay on top of the market.

The following are some of the major players in the Global Buy Now Pay Later industry:

• Affirm, Inc.
• Afterpay Pty Ltd
• Atome
• Flipkart Internet Private Limited
• Grab Holdings Inc.
• Hoolah Holdings Pte Ltd.
• Klarna Inc.
• LatitudePay Australia Pty Ltd
• Laybuy Group Holdings Limited.
• Mastercard International Incorporated
• Monzo Bank Limited
• One97 Communications Limited (Paytm)
• Openpay Pty Ltd.
• Payl8r (Social Money Ltd.)
• PayPal Holdings, Inc.
• Perpay Inc.
• Sezzle Inc
• SPLITIT USA INC.
• Zip Co Limited
• Other Key Players

Recent Developments

• In January 2022: Santander, Spanish Bank launched its buy now, pay later application ‘Zinnia’ for the European market. The Zinnia app helps consumers to purchase with monthly interest-free installment payments across European countries.
• 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 Artificial intelligence (A.I.) technology that offers consumers and merchants opportunities through alternative credit products.
• In 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.

Report Scope