Statistics show that online shopping doubled during the pandemic. With the rise in retail therapy and simultaneous economic uncertainty faced by many during the pandemic, it’s no wonder that Buy Now, Pay Later (BNPL) technology has emerged recently to huge success.
The financial technology that allows users to make purchases while delaying their payments has been embraced by shoppers over the past two years across the world. Statistics on BNPL from The Ascent confirm that income loss and uncertain finances have seen more Americans protecting their cash flow while seeking alternative methods of borrowing money.
In July 2020, the report surveyed 2,000 Americans about their BNPL habits. Compared to a later survey in March 2021, the findings show an almost 50% growth in less than a year. With Covid severely impacting people’s finances and spurring uncertainty about job security over the long term, it should come as no surprise that the report found that 64.43% of BNPL users have used the service since the pandemic began.
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When surveying consumers about what was behind their increased usage, the survey found that 41.31% opted for BNPL to conserve cash in case of an emergency, while 30.04% said it was because they had been shopping more, and 24.62% reported that it was because they lost income and needed a way to make purchases.
Additional reports also confirm that the BNPL market is on fire, with Coherent Market Insights finding that the size of the market for BNPL platforms is expected to reach USD $33.64 Billion by 2027 at a Compound Annual Growth Rate (CAGR) of 21.2% between 2020 and 2027. A recent report by Worldpay on global payments also found that BNPL accounted for 1.6% of global e-commerce transactions in 2019 and is forecast to grow its share to 2.8% in 2023.
One particular company that is a prime example of the success of BNPL is Affirm, which went public in January 2021. The company has experienced huge growth, recently announcing a forthcoming BNPL debit card.
With the rapidly expanding DeFi space, the cryptocurrency world is also embracing BNPL technology. Over the last few decades, what once started as an experiment has proven itself to become a mainstay of mainstream technology. For many, especially those living under controlling governments, using cryptocurrency provides not only secure investment opportunities but a means to their financial freedom.
A new concept that fuses the utility of BNPL technology with the security of the blockchain is a DeFi protocol @Pay. The platform that launched in 2022 hosts a one-of-a-kind BNPL platform secured over the Solona and Algorand blockchain.
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The platform enables cryptocurrency users to not only hold their investments for future returns but also use their investments to pay for shopping for groceries. Using its smart contract technology, @Pay allows users to pay for their shopping with fiat currency or any approved cryptocurrency that they hold in their @Pay wallet. In addition to the ability to hold off on payments, users can also get rewards through the company’s online reward program.
It’s no secret that the pandemic has brought about anxiety about financial stability for many. With mass layoffs and inflation still a major threat to the economy, the financial implications of the pandemic are still prevalent in society. Amidst the turmoil, however, technology has innovated new solutions to help those struggling get by in uncertain times.
As the emergence of BNPL technology has empowered users to fulfill their financial needs in times when cash flow is uncertain, the market looks set for explosive growth in the short-term future. As cryptocurrency continues to be rapidly adopted into the mainstream, the technology combined with BNPL presents an opportunity for those to not only take control of their finances but to do so with the safety and security of the blockchain.
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