The buy now pay later market size has grown exponentially in recent years. It will grow from $156.58 billion in 2023 to $232.23 billion in 2024 at a compound annual growth rate (CAGR) of 48.3%. The buy now pay later market size is expected to see exponential growth in the next few years. It will grow to $1014.82 billion in 2028 at a compound annual growth rate (CAGR) of 44.6%.
The growth in the historic period can be attributed to e-commerce growth and online shopping trends, consumer demand for flexible payment options, rise of digital wallets and mobile payments, increase in millennial and gen z consumer base, competition among payment service providers.
The growth in the forecast period can be attributed to expansion of bnpl services to physical retail, growth in cross-border e-commerce, adoption by traditional retailers, emphasis on responsible lending and consumer protection, rise of embedded finance and bnpl as a service. Major trends in the forecast period include integration with point-of-sale systems, personalization of bnpl offers, collaboration between bnpl providers and merchants, integration with loyalty programs, regulatory developments in the bnpl space.
An increase in the adoption of online payment methods is expected to propel the growth of the buy-now-pay-later market going forward. Online payments refer to payments that are made for goods or services that have been purchased online or offline. With the buy now, pay later option, customers can make small-ticket purchases both offline and online and make fast payments. For instance, in April 2021, according to Razorpay, an India-based financial services company, the rate of digital payment transactions in India during January, February, and March 2021 increased by 76% compared to the same period in 2020, whereas Buy Now Pay Later (BNPL) experienced a staggering growth of 569%. Therefore, the increase in the adoption of online payment methods is driving the buy-now-pay-later market growth.
An increase in the growth of E-commerce is expected to propel the growth of the buy now pay later market going forward. E-commerce, short for 'electronic commerce,' refers to the buying and selling of goods and services over the internet. It involves various online activities, including online shopping, electronic payments, digital product delivery, and online auctions.
Buy Now, Pay Later (BNPL) is a popular payment method in the world of e-commerce. It allows online shoppers to make purchases and defer payment, often splitting the total cost into installment payments. This option enhances the shopping experience by providing flexibility, enabling customers to try products, and make easy, interest-free payments over time. For instance, in February 2023, Forbes, a US-based business magazine published an article that said the total e-commerce sales are expected to grow 10.4% in 2023 and it is expected that by 2026, 24% of retail purchases would take place online. Therefore, an increase in the growth of e-commerce will drive the buy now pay later market.
Technological advancement is a key trend gaining popularity in the buy-now-pay-later market. Major market players are concentrating on offering customers cutting-edge digital services to sustain their position in the buy-now-pay-later market. For instance, in January 2022, Temenos, a Switzerland-based software and apps company, launched Temenos Banking Cloud, the first AI-driven buy-now-pay-later banking service in the market.
Through alternative credit products, this offering is expected to give banks and fintechs additional revenue options, assist them in expanding into new areas, and strengthen their connections with customers and business partners. By offering transparency into automated judgments and pairing BNPL customers with suitable loan offers based on their past, Temenos BNPL assists banks in developing lending programs that are driven by patented, explainable AI technology. Therefore, technological advancement is boosting the growth of the buy-now-pay-later market.
Major companies operating in the buy now pay later market are developing innovative solutions to sustain their position in the BNPL market such as the Galileo Buy Now, Pay Later solution. The Galileo Buy Now, Pay Later solution is a unique BNPL solution with issuance of single-use virtual cards and complete loan servicing.
For instance, in December 2022, Galileo, a US-based financial technologies company launched the Galileo Buy Now, Pay Later solution which aims to make the customizable solutions available to banks and fintech's. The mobile application of the bank or fintech shows a real-time bespoke offer. A prefunded, one-time virtual card will be loaded to the customer's mobile wallet and made available in-store or online at most retailers if they accept the loan offer. Financial institutions will be able to easily enter the highly sought-after BNPL market with this solution, giving their clients more purchasing power.
North America was the largest region in the buy now, pay later market n 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The countries covered in the buy now pay later market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Canada, Spain.
Key Topics Covered:
1. Executive Summary
2. Buy Now Pay Later Market Characteristics
3. Buy Now Pay Later Market Trends And Strategies
4. Buy Now Pay Later Market - Macro Economic Scenario 4.1. Impact Of High Inflation On The Market 4.2. Ukraine-Russia War Impact On The Market 4.3. COVID-19 Impact On The Market
5. Global Buy Now Pay Later Market Size and Growth 5.1. Global Buy Now Pay Later Market Drivers and Restraints 5.1.1. Drivers Of The Market 5.1.2. Restraints Of The Market 5.2. Global Buy Now Pay Later Historic Market Size and Growth, 2018 - 2023, Value ($ Billion) 5.3. Global Buy Now Pay Later Forecast Market Size and Growth, 2023 - 2028, 2033F, Value ($ Billion)
6. Buy Now Pay Later Market Segmentation 6.1. Global Buy Now Pay Later Market, Segmentation By Channel, Historic and Forecast, 2018-2023, 2023-2028F, 2033F, $ Billion
Online
POS
6.2. Global Buy Now Pay Later Market, Segmentation By Enterprise Size, Historic and Forecast, 2018-2023, 2023-2028F, 2033F, $ Billion
Large Enterprises
Small and Medium Enterprises
6.3. Global Buy Now Pay Later Market, Segmentation By End Use, Historic and Forecast, 2018-2023, 2023-2028F, 2033F, $ Billion
Consumer Electronics
Fashion and Garment
Healthcare
Leisure and Entertainment
Retail
Others End-User
7. Buy Now Pay Later Market Regional And Country Analysis 7.1. Global Buy Now Pay Later Market, Split By Region, Historic and Forecast, 2018-2023, 2023-2028F, 2033F, $ Billion 7.2. Global Buy Now Pay Later Market, Split By Country, Historic and Forecast, 2018-2023, 2023-2028F, 2033F, $ Billion
A selection of companies mentioned in this report includes
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