BNPL is a new layer adding itself to the payment infrastructure, with the aim of reducing friction at the point of payment and simplifying access to small loans. Most of the leaders in the BNPL sector are new companies that are pushing for the growth of the market while competing against credit card providers.
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The Buy Now Pay Later – Thematic Research Report offered by GlobalData gives insights of the different trends impacting the BNPL market. The report also provides industry analysis, as well as the value chain associated with the BNPL market.
Key Technology Trends Impacting the BNPL Market
- Online payments
- Mobile payments/Mobile commerce
- Social media
- Super apps
- Machine learning
BNPL was initially developed around the online payment ecosystem, which makes integrating it into ecommerce platforms a seamless process for merchants and payment technology providers. By integrating itself at checkout, and in some cases at the start of the process, BNPL services are a seamless part of the online shopping journey for consumers. Ecommerce platforms have been a key factor in the rapid growth of BNPL providers.
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For more insights on technology trends impacting the Buy Now Pay Later theme, download a free report sample
Key Macroeconomic Trends Impacting the BNPL Market
- Millennials and Generation Z
- BNPL providers collaborating with card scheme networks
- Low-income consumers
- Credit cards
- Inflation
- Consumers’ online shopping expectations
- Open banking
- Acquisitions
- COVID-19 impact
- Russia-Ukraine conflict
According to GlobalData’s 2021 Financial Services Consumer Survey, millennials and Generation Z are the main demographics using BNPL. They are attracted to these services due to the flexibility they offer and their interest-free model. BNPL providers are using social media and ecommerce platforms to directly market to these consumers. Millennials and Generation Z are the largest audiences using social media platforms, so they naturally became the main targets of BNPL providers.
For more insights on macroeconomic trends impacting the Buy Now Pay Later market, download a free report sample
Key Regulatory Trends Impacting the BNPL Market
- BNPL regulation
- Failure to properly disclose terms and conditions
- Strong Customer Authentication (SCA)
- BNPL credit approval process
The explosion of BNPL has attracted regulatory scrutiny. As competition becomes fiercer, merchants are gaining more BNPL options, both in provider types (fintechs or banks) and the economics of their business model. Merchants typically pay their BNPL partner a flat fee representing a percentage of a consumer’s transaction, but as merchants gain more negotiating power they may seek to drive those fees down. On the other hand, if BNPL becomes ubiquitous, persistently high fees could lead to regulatory scrutiny because the credit card processing fees merchants pay card networks are lower.
For more insights on regulatory trends impacting the Buy Now Pay Later theme, download a free report sample
Key BNPL Value Chains
- Lending
- Open Banking
- Security Provider
- Credit Bureaus
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