SRM (Strategic Resource Management), an independent advisory firm serving financial institutions, manufacturing, retail, and other industries across the U.S. and Europe, released its most recent report, “Buy Now, Pay Later: What’s Old is New Again in Payment Choices.”
“While the BNPL models are still being shaped, consumers have demonstrated a strong appetite for these services – and who better to offer BNPL than trusted financial institutions?”
Buy Now, Pay Later (BNPL) has a far-reaching effect; Allied Market Research forecasts that the global BNPL market will grow at a 45.7% compound annual growth rate (CAGR) through 2030. While it has gained serious traction, much of the BNPL financing volume has been handled by fintech companies. Community banks and credit unions have been hesitant to provide the service, influenced by regulatory uncertainty.
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With all factors considered, SRM believes financial institutions must give serious strategic consideration to BNPL – not as a standalone installment credit offering but as a component of a holistic product set. Given the decline in the number of FIs charging nonsufficient funds (NSF) and overdraft fees, BNPL could offer a new source of non-interest income. This new report provides an overview of the existing and projected BNPL landscape, market lessons to date, and the opportunities and threats stemming from action and inaction.
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“While the BNPL models are still being shaped, consumers have demonstrated a strong appetite for these services – and who better to offer BNPL than trusted financial institutions?” said Myron Schwarcz, SRM’s Chief Product Officer. “Our report breaks down why adoption is increasing, why financial institutions need to pay attention, and how BNPL can fit into an institution’s holistic banking strategy. The demand is there, and now is the time for financial institutions to step up to the plate.”
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