Buy Now Pay Later Services Market 2031 | Growth and Forecast
The buy now pay later services market is anticipated to expand at a CAGR of 26.5 % from 2023 to 2031. Consumer preference for flexible payment options, e-commerce growth, and online shopping trends are driving the buy now pay later services market growth.
Buy Now Pay Later Services Market Analysis
The buy now pay later services market has witnessed rapid growth, driven by consumer demand for flexible payment options. Companies such as Afterpay, Klarna, and Affirm have gained prominence, offering users the ability to make immediate purchases and repay in installments. This trend is reshaping online and in-store shopping experiences, especially among younger demographics. However, concerns about potential debt accumulation and regulatory scrutiny are emerging challenges. The buy now pay later services market continues to evolve, with new players entering and established ones expanding globally, emphasizing the need for ongoing monitoring of this dynamic financial services sector.
Buy Now Pay Later Services Market Industry Overview
- Buy Now, Pay Later (BNPL) services are financial solutions that enable consumers to make purchases and defer payments over a specified period. Typically offered by third-party providers or integrated into retailers' checkout processes, BNPL services allow customers to acquire goods or services instantly and pay for them in installments. This payment option often involves little to no interest if payments are made within the agreed-upon timeframe.
- Customers appreciate BNPL for its flexibility and accessibility, as it doesn't require traditional credit checks and offers a straightforward application process.
- However, there can be potential pitfalls, such as late fees or interest charges, if payments are not made on time. BNPL has gained popularity for its convenience and ability to cater to consumers who prefer an alternative to traditional credit cards. Users need to understand the terms and conditions associated with each BNPL service to make informed financial decisions.
- As with any financial product, responsible and careful usage is crucial to avoid potential debt issues. BNPL allows shoppers to make purchases and defer payment, often breaking it into installment plans without incurring interest. Key players in this market include Afterpay, Klarna, Affirm, and others. This financial model appeals to consumers seeking alternatives to traditional credit cards and loans. Merchants benefit from increased conversion rates and customer loyalty.
- The BNPL trend gained momentum as e-commerce and online shopping surged. Global adoption of BNPL services continues to expand, with partnerships formed between service providers and major retailers. Traditional financial institutions are also entering this space, recognizing the evolving consumer preferences. The market's future dynamics depend on regulatory developments, risk management practices, and sustained consumer trust in these innovative payment solutions.
Strategic Insights
Buy Now Pay Later Services Market Driver
Consumer Preference for Flexible Payment Options and E-commerce Growth and Online Shopping Trends to Drive the Buy Now Pay Later Services Market
- The growing popularity of Buy Now, Pay Later (BNPL) services is primarily driven by changing consumer preferences. Many individuals, especially millennials and younger demographics, prefer flexible payment structures that deviate from traditional credit card models.
- BNPL allows customers to spread the cost of purchases over several installments, making high-value items more accessible without the immediate financial burden. This flexibility resonates with those who prioritize budget management and want more control over their spending.
- Also, the rapid expansion of e-commerce and the shift toward online shopping have significantly fueled the BNPL market. As more consumers engage in digital transactions, the need for seamless and convenient payment methods has intensified. BNPL services integrate effortlessly into online checkout processes, providing a quick and straightforward payment option.
- The partnership between BNPL providers and e-commerce platforms enhances the total shopping experience, resulting in higher conversion rates for online retailers. The convenience of deferred payments aligns with the digital-first behavior of contemporary consumers, contributing to the sustained growth of BNPL services. Therefore, the now pay later services market share is increasing.
Buy Now Pay Later Services Market Report Segmentation Analysis
Based on the channel, the online segment dominated the market in 2023. Numerous businesses all over the world are striking partnerships and collaborations to focus on adopting various methods for payment, including BNPL, as part of their post-COVID revival plans. For instance, in August 2021, Uplift, Inc. partnered with Tripster, an all-in-one travel booking site. With this partnership, Tripster authorized its customers to plan the entire vacation in a single place and pay with surprise-free monthly installments through Uplift with ease. Hence such increasing partnerships and collaborations to adopt various methods, which is further anticipated to boost the buy now pay later services market growth.
Buy Now Pay Later Services Market Regional Analysis
The scope of the buy now pay later services market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. Asia Pacific (APAC) is experiencing rapid growth and is anticipated to hold a significant buy now pay later services market share. The region's significant economic development, growing population, and increasing focus on financial inclusion across diverse economies have contributed to this growth. APAC's emerging markets, characterized by a large unbanked population and a growing entrepreneurial culture, have presented substantial opportunities for the buy now pay later services market.
Buy Now Pay Later Services Market Report Scope
The " buy now pay later services Market Analysis" was carried out based on distribution channel, coverage, and geography. In terms of channel, the market is segmented online and POS. Based on end-use, the buy now pay later services market is segmented into retail, automotive, and others. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Buy Now Pay Later Services Market News and Recent Developments
Companies adopt inorganic and organic strategies such as mergers and acquisitions in the buy now pay later services market. A few recent key market developments are listed below:
- In January 2022, Within the Temenos Banking Cloud platform, the banking software company Temenos introduced an Al-based BNPL banking service. The platform, which uses alternative credit products, gives opportunities to merchants and consumers alike. It is built on Al technology.
[Source: Temenos., Company Website]
- In January 2022, Affirm Holdings Inc. introduced two noteworthy product suites: the Affirm SuperApp and the Chrome browser extension. SuperApp is a single, user-friendly solution that offers sophisticated BNPL alternatives for financial services, shopping, and payments.
[Source: Affirm Holdings Inc., Company Website]
Buy Now Pay Later Services Market Report Coverage & Deliverables
The market report “Buy Now Pay Later Services Market Size and Forecast (2021–2031)”, provides a detailed analysis of the market covering below areas-
- Market size & forecast at global, regional, and country-level for all the key buy now pay later services market segments covered under the scope.
- Market dynamics such as drivers, restraints, and key opportunities.
- Key future trends.
- Detailed PEST & SWOT analysis
- Global and regional buy now pay later services market analysis covering key market trends, key players, regulations, and recent market developments.
- Industry landscape and competition analysis covering market concentration, heat map analysis, key players, and recent developments.
- Detailed company profiles.
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Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
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to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
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to country scope.
Frequently Asked Questions
The key players holding majority shares in the global buy now pay later services market are Affirm, Inc., Klarna Inc., Splitit Payments, Ltd., Sezzle Perpay Inc., Zip co, Ltd, and PayPal Holdings, Inc.
Consumer preference for flexible payment options E-commerce growth, and online shopping trends are the major factors that propel the global buy now pay later services market.
The global buy now pay later services market is expected to grow at a CAGR of 26.5 % during the forecast period 2023 - 2031.
Growing technological advancements in payment methods are anticipated to play a significant role in the global buy now pay later services market in the coming years.
- Affirm, Inc.
- Klarna Inc.
- Splitit Payments, Ltd.
- Sezzle Perpay Inc.
- Zip Co, Ltd
- PayPal Holdings, Inc.
- AfterPay Limited
- Openpay
- LatitudePay Financial Services
- HSBC Group
- Payl8r
- Zip Co Limited
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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