The powerful fintech unicorn Klarna recently reached $ 46 billion and buy right now, paying for the service later continues to grow tremendously, especially in North America, Australia, and Europe. It is estimated that there are currently more than 170 companies on the BNPL market site, with new ones added every month.
Fintech’s Upgrades recently announced that it is entering BNPL’s business and is not the only BNPL jumper. The start-up is supported by large pay lines that plan to offer Buy Now, Pay later service as a payment method through their platforms. Digital bank Monzo has started offering BNPL a flexible product and Revolut also plans to buy it later.
Is the BNPL market becoming crowded?
The big names are also entering the market through acquisitions – last month PayPal acquired BNPL’s paid service in Japan and Jack Dorsey’s square bought the Afterpay BNPL service in August with a $ 29 billion contract. Goldman Sachs also recently saved a piece of the pie, earning $ 2.24 billion from BNPL’s GreenSky service.
Buy Now, Pay later makes a place with more people. It still accounts for about 2% of the global e-commerce market, but buy now, pay later services are growing at an average of 39% per year. According to FIS Worldpay, by 2023, they would account for around 5% of global e-commerce, excluding China.
Let’s take a closer look at which BNPL markets are already full and where there is still room for new BNPL companies.
BNPL in Australia
Australia is one of the largest BNPL markets in the world. The Reserve Bank of Australia estimates that there are around 20 BNPL market services on the Australian BNPL market, offered by more than a dozen providers.
The two largest are home-based Afterpay and Zip Pay, which have a total of 6 million active BNPL user accounts as of December 2020. According to Worldpay, Australians made 10% of their e-commerce purchases through BNPL in 2020, and that’s it. By 2023, that number should rise to 17%.
BNPL in Europe
The current rapid growth in acquisitions, subsequent payments in Europe, has been made in part by the media, looking at record-breaking uncontrolled cash flows from BNPL’s fintech such as Klarna. The Worldpay statement says that the BNPL market will account for about 9% of e-commerce revenue by 2023 and 11% by 2025.
The largest and most popular player in the European BNPL market is Klarna, but there are other competitors, including:
- Afterpay (UK, Italy, France, Spain)
- Alma (France)
- Twisto (Czech Republic, Poland)
- Paypal (United Kingdom, Germany, France, Spain)
- Laybuy (United Kingdom)
BNPL in the USA
BNPL’s market share of e-commerce transactions in the US was only 2% by 2020, but this still means that millions of people are actively using late payment methods. It is estimated that there will be 45 million BNPL users by 2021 and more than 76 million by 2024.
Fortunately, Affirm dominated the market significantly in 2008 with almost 80 percent, but has now given way to other suppliers. The top six Buy Now, pay later services, calculated by some downloads, were:
- BNPL in China
This scourge has significantly increased online shopping in China, and the trend continues. In the United States, where store brakes have partnered with fintech to offer BNPL on departure, major Chinese e-commerce platforms have developed their systems.
BNPL in India
The Indian BNPL market is still waiting for BNPL fintech to decline, as the transition to a non-financial society began immediately after Europe or SA Asia. The market is expected to grow amazingly in 2025 and many players have already started. These include LaysPay, Simpl, Capital Float, and ZestMoney. The Bangalore company recently announced that it has received $ 50 million in new funding from zipping, Australia.
According to the Bernstein report, BNPL’s markets in India are estimated at $ 15 billion and could reach $ 100 billion by 2025. This may be one of BNPL’s hottest markets. On the other hand, this market can be a challenge for global fintech players.
BNPL in Southeast Asia
Buy Now, pay later is successful in Southeast Asia, even though only 27% of the region’s 670 million people have bank accounts. Southeast Asia is predicting one of the fastest-growing BNPL market regions due to the growing number of internet users, and many fintech companies have even jumped on the bandwagon to meet demand.
Major players include:
- Grab- GrabPay (Singapore and Malaysia)
- GoJek (Indonesia)
- Razer (Singapore)
- Oriente- Cashalo (Hong-Kong)
- Hoolah (Singapore, Hong Kong, Malaysia)
- ReePay (Vietnam)
Evidence of the rapid growth of BNPL services in Southeast Asia is based on data released by Hoolah. According to the company, during the epidemic, their BNPL service saw a sales increase of more than 1,500%, revenue over eight hundred percent, and retailers and customers volume over 400%. Hoolah also represented a series of volumes increased by 600% from May 2020 to May 2021.
BNPL fintechs have taken over the world, and there are indications that there is still plenty of room to buy new ones right now, paying companies later in most markets. In the markets of Africa, the Middle East, Asia, and Latin America, the BNPL craze is yet to come. There, technology buildings and access to phones and mobile phones are a major challenge.
By 2025, the global BNPL industry is expected to grow 10-15 times its current volume to $ 10 billion. Thus, such growth means that BNPL providers are more likely to face regulatory barriers and fierce competition from employers.