Buy Now Pay Later Market: Global Industry Analysis and Forecast (2024-2030)

The Buy Now Pay Later Market size was valued at USD 235.36 Billion in 2023 and the total Buy Now Pay Later revenue is expected to grow at a CAGR of 36.17% from 2024 to 2030, reaching nearly USD 2046.08 Billion.
The Global Buy Now Pay Later Market Overview
Buy now, pay later (BNPL) is a type of short-term financing that allows consumers to make purchases and pay for them over time, usually with no interest. BNPL is a popular payment option for e-commerce and brick-and-mortar retailers alike. It can be a convenient way to spread out the cost of a purchase, especially for larger or more expensive items.To know about the Research Methodology :- Request Free Sample Report

Retailers are increasingly offering "buy now, pay later" solutions that allow customers to purchase basic essentials by choosing a responsible financing plan and making payments gradually rather than all at once. "Buy Now, Pay Later" enables a customer to break up a retail purchase into a number of smaller, interest-free payments and make them over time. The widespread usage of the buy now pay later payment platform by business owners to finance expensive machinery, purchase raw materials, and pay employee wages. The buy now pay later payment method is also being used by more young people since it has a number of advantages over other payment options, including the opportunity to pay for pricey things like computers and cell phones as well as school supplies and cafeteria expenses.

Credit mechanisms have long been used by consumers to make purchases of goods and services. In recent years, a credit card substitute that's also emerging quickly throughout many industrialized economies, including the US, UK, China, and India has appeared. All consumer groups are using BNPL more consistently. For instance, in the US, BNPL consumption has more than tripled since 2019. The growing adoption of buy now pay later is anticipated to drive rapid and potentially substantial deployment and utilization of the latest trends that are boosting the buy now pay later market’s growth.
Buy Now Pay Later Market Dynamics
Buy Now, Pay Later is Transforming Online Shopping

The Buy Now, Pay Later (BNPL) is a point-of-sale financing option that has gained popularity recently, especially with younger demographics. Late payments and declining credit limits were just two of the financial stress-related problems that the COVID-19 pandemic made worse. Due in part to this, the overall use of credit cards across the globe has decreased over the past few years, creating a space for other payment methods to appear. BNPL financing market solutions were created to give customers the option to acquire their products and pay in a predefined number of installments over time as an alternative to credit cards and other types of financing. These options are frequently provided to clients at low or no interest rates and with no additional costs, thus there is no expense to the client.

Customers wishing to make purchases can choose from quick approval times, 0% interest choices, and a predetermined payment schedule with Buy Now, Pay Later services. Globally, consumers use Buy Now, Pay Later services to avoid paying credit card interest, make impulsive purchases, and borrow money without a credit check. Buy Now, Pay Later emerged as the favorite option for customers across all age categories in 2023, according to an MMR survey, with the youngest consumer being 18 years old and the oldest being 66. According to the poll, men from tier 1 and 2 cities spent a lot on lifestyle and fashion, while women from these same cities invested in ed-tech improvements for devices and upskilling.

Buy Now Pay Later as a Online Installment Payment Market

Buy Now, Pay Later (BNPL) creditors commonly mandate borrowers to contribute a portion (usually 25%) of the item's cost as an upfront payment during purchase this serves as initial payment among the five creditors. This Buy now pay later market serves dual purpose, as using these cards networks, instantaneous verification of the applicant and also cheking account funds and also it enables automatic instalment deduction from same card. This phenomena helps in smooth transaction, easy usages, which leads to growth of buy now pay later market along with boosting card network usage. Debit card usage predominates, accounting for 90.4% of all transactions in 2023 across the surveyed lenders. The debit card's share ranged from 74% to 92%, while the credit card's share spanned 8% to 21% among these lenders. The combination of debit and credit cards constituted over 99% of payments in each of the surveyed years.



Share Of BNPL Installment Payments, by Payment Method, 2019-2021


Payment Method 
2019
2020
2021
2022


Debit card
86.8%
88.5%
89%
90.4%


Credit Card
12.5%
11%
10.1%
10%


ACH
0.3%
0.2%
0.6%
0.8%


Prepaid Card
0.3%
0.3%
0.3%
0.3%


Check
<0.1%
<0.1%
<0.1%
<0.1%



BNPL services have raised concerns about allowing credit card payments, effectively enabling borrowers to use credit to pay for credit, the highlighted risks involve potential "hidden interest" charges and broader worries about overextending debt across credit products. All surveyed lenders give borrowers the option to alter their payment method for subsequent installments, available through various online portals, Interactive Voice Recognition, and traditional phone channels. Depending on the lender and contact method, subsequent payments can be made through an Automated Clearing House (ACH), prepaid card, or check. These policies enable lenders to maintain a higher level of payment consistency to keep credit losses below a desired threshold, potentially allowing for less stringent credit allocation strategies. This allows consumers to switch options, ease of transaction, and no hidden interest charges growing the Buy Now Pay Later industry.
Buy Now Pay Later Market Trends
Mobile commerce and online shopping are spreading very fast all over the world, the growth of this market is huge, with consumers shopping online and seeking an opportunity to stretch out their payments. The world’s middle class is expanding at a fast pace, Consumers have their choices of shopping through the Buy Now Pay Later industry, as they’ve expanded the pool of possible buyers for the Buy Now Pay Later services. The number of Buy Now Pay Later service providers is globally rising at a very fast pace, which makes it easier for consumers to search and use Buy Now Pay Later. The BNPL market is still largely fragmented, where several BNPL providers across the globe possess varying strengths and weaknesses. Additionally, the industry has a significant degree of competition the market is anticipated to experience rapid growth in the forecasted period.

The e-market, which includes e-retail, online travel, food delivery, education, and e-health among others registers tremendous growth in the medium term. To foster economic growth and increase the depth of online shopping, larger penetration in geographic (tier 2/3 cities) and increasing number of online shoppers. The global online retail sector is expected to experience a high rate of growth. Rising use of mobile banking, use of internet phones, and inclination towards E-shopping are likely to penetrate the different categories of global retail stores, this is fueling online penetration because more people are investing in tech companies. Digital P2M payments post XX % CAGR, still continue to show impressive growth momentum, this increase has mainly been caused by an expansion of the subsequent investments leading to a growth in literacy, smartphone ownership, and internet penetration. Cash on delivery, for example, is one of these e-commerce transaction payments, with mobile payments leading the way Currently, the biggest form of p2m payments is through (UPI).

Impact of Regulation on the Buy Now Pay Later Market

Fintechs and a few technology companies currently control the majority of the Buy Now Pay Later on a global scale. Micro-finance organizations as well as other new, small, and developing Fintechs are entering this market. Since Buy Now Pay Later providers typically do not charge interest, the Buy Now Pay Later financing market is mostly unregulated. As a result, the credit authorities in the majority of countries do not compel them to follow the code of behavior. This puts customers in serious danger. Customers frequently run the risk of receiving credit that is beyond their means. The majority of clients are unclear on the risk of Buy Now Pay Later. As a result, extending credit to customers that are susceptible carries more risk.

As a growing number of smaller players join the game, regulators in each country may enact stricter controls. This implies that there might soon be a procedure for approving the onboarding of new merchants to Buy Now Pay Later systems. Another option is that getting regulatory agency clearance would be necessary before launching a Buy Now Pay Later product. For the SMB loan category, stricter approvals may be in store. In the UK, it has been suggested that the Financial Conduct Authority (FCA) oversee the Buy Now Pay Later sector. In order to entice more high-quality customers over time, banks are expected to implement responsible lending practices. They ought to think about viable long-term tactics for fostering consumer comfort and confidence.
Buy Now Pay Later Market Segment Analysis:
By Channel, the Buy Now Pay Later Market is segmented into Online and POS. In 2023 the Online segment accounted for around 67.2% of total revenue. As part of their post-pandemic revival strategies, numerous companies all around the world are forming partnerships to concentrate on the adoption of the fastest-growing online payment options, like buy now pay later. For instance, Uplift, Inc., a provider of BNPL solutions, declared its relationship with Tripster, a one-stop website for booking travel, in August 2023.

Over the forecast period, a considerable growth rate is expected for the PoS channel segment. To improve customer satisfaction and solidify their relationships with clients, several firms are concentrating on offering PoSBNPL financing solutions. Additionally, companies provide customers with clear PoS installment lending schemes that are loyalty-driven. As a result, companies are seeing higher percentages of recurring customers.

By Enterprise Size, the Buy Now Pay Later Market is segmented into Large Enterprises and Small & Medium Enterprises. The Large Enterprises segment dominated the market share accounting for 61.37% in 2023. Large Enterprises frequently use the purchase now pay later option because it gives customers a flexible and affordable payment option for expensive things. Due to the ease of shopping, customers are able to acquire more goods, which boosts sales. On the other hand, it is expected that the segment of small and medium-sized businesses would grow at the fastest rate through the forecast period. To increase sales conversion rates, small and medium-sized businesses all over the world are concentrating on buy now pay later options. Buy now pay later also offers more clarity because all of its costs and prices are made available to the public. Small and medium-sized businesses prioritise growing their clientele and strengthening their competitive position.

By End-User, the Buy Now Pay Later Market is segmented into Consumer Electronics, Fashion & Garment, Healthcare, Leisure & Entertainment, Retail, and Others. The Fashion & Garment segment dominated the market share accounting for 39.46% in 2022. The industry is seeing a surge in the use of BNPL solutions since they make it simple for clients to spread out the expense of a purchase over a period of time with fixed, interest-free payments. For instance, BNPL solution provider Affirm, Inc. announced in October 2021 that it had partnered with customer clothing site Theory to provide clients interest-free payments on accessories and sportswear. Such elements are encouraging for the segment's growth.

Over the forecast period, the consumer electronics segment is expected to grow at strong CAGR. BNPL payment mechanisms are becoming more widely used in the market as a low-friction alternative to credit cards. Customers also choose BNPL payment methods over credit cards because they avoid costly compound interest and hidden costs. Over the forecast period, it is expected that increased consumer electronic provider awareness of the flexible BNPL payment mechanism would fuel demand for these services.
Buy Now Pay Later Market Regional Insights:
North America region held the largest market share accounting for 34.51% in 2023 and it is expected to dominate the market through the forecast period. The region’s growth is attributed to the existence of numerous notable firms. Several fintech businesses in the region are collaborating with entertainment businesses to provide Buy Now Pay Later services for booking hotels. In 2021, the Buy Now Pay Later market in the U.S. witnessed remarkable growth, capturing a significant share of online transactions, estimated to be around 5-7% of all online retail sales. There are many future advancements for instance, in September 2021, American theme park and entertainment corporation SeaWorld Parks & Entertainment, Inc., teamed with Uplift, Inc., a developer of Buy Now Pay Later solutions.

The Asia Pacific region is expected to exhibit remarkable growth in the Buy Now Pay Later Market with a strong CAGR through the forecast period. In the Asia-Pacific area, the idea of "buy now, pay later" is relatively new. According to MMR analysis, the buy now, pay later option is very common among millennials. In addition, the region's growing internet usage is opening up growth opportunities for buy now pay later. Thanks to the emergence of e-commerce and digital payments as well as the quick growth of Fintechs, buy now pay later (BNPL) is a developing loan tech sector in India. In addition, GenZ consumers, young millennials, and first-time credit borrowers, who are typically overlooked or underserved by traditional banks, choose BNPL since it is so easy to acquire credit. An $3–3.5 billion BNPL market in India would increase to $60-65 billion by 2029.

Europe is also expected to grow at a significant growth rate through the forecast period. Several large firms, including those in France, Germany, the United Kingdom, and other European nations, are also increasing the range of services they provide there. For instance, in January 2022, PayPal debuted its Pay in 30 Days buy-now, pay-later option in Germany. Users of the service are free to spend up to $1,115 in total over the course of 30 days. Several BNPL providers were active in the UK buy now pay later market, with companies like Klarna, Clearpay (Afterpay), Laybuy, and Openpay being among the prominent players. These providers offered varied services and payment options to consumers across a wide range of online retailers. BNPL services have gained considerable traction among UK consumers. Estimates indicated that BNPL transactions accounted for approximately 6-8% of the total UK e-commerce market by the end of 2021, showcasing a notable share of online retail transactions.

Middle East and North Africa(MENA) and Commonwealth of Independent States (CIS) Buy Now, Pay Later (BNPL) services gaining traction, especially in countries like the United Arab Emirates (UAE), Saudi Arabia, Egypt, and others. Various local and international providers were entering these markets, offering installment-based payment options. While still in its early stage compared to more mature markets, BNPL services are becoming increasingly popular, particularly among younger, digitally savvy consumers. The appeal of flexible payment options without interest charges resonated with many consumers, especially for online purchases. Some markets, like the UAE and Saudi Arabia, exhibited faster adoption due to their relatively developed e-commerce ecosystems and consumer behaviors favoring digital payments.

The Buy Now, Pay Later (BNPL) market in the Commonwealth of Independent States (CIS) region, comprising countries such as Russia, Ukraine, Kazakhstan, and others, showing signs of emerging interest and growth in flexible payment solutions, although the markets not as mature as in some other regions. BNPL services are gradually gaining attention and beginning to penetrate the market in CIS countries. While not as prevalent as in some Western markets, BNPL options are becoming available to consumers in selected retail sectors. MMR Analysts anticipated potential growth opportunities for BNPL services in the CIS region, driven by increasing consumer demand for convenient payment solutions and the expanding e-commerce sector.
Competitive Landscapes:
Key Players are heavily investing in R&D to enhance the technical capabilities of buy now pay later systems. Industry participants have tried a number of strategic efforts, such as offering a variety of product lines, joint ventures, mergers, acquisitions, and collaborations. These strategies aid businesses and other market participants in expanding their position in the worldwide buy now pay later industry.
For instance, PayPal Holdings Inc. announced in June 2022 that it is expanding its line of credit products to include a new business credit card to assist small business owners with their ongoing financial demands. The first business credit card that PayPal provides is the PayPal Business Cashback Mastercard. It utilises the Mastercard network and is issued by WebBank. The card offers customers 2% cash back on all transactions and has no annual fee. It is one of the best cashback rewards available because there are no restrictions on how much cash back you can receive or when it expires.

A large number of companies are concentrating on creating and releasing a BNPL installment solution that allows customers to pay over time with no interest. These product introductions are intended to give consumers a better overall shopping experience. For instance, PayPal Holdings, Inc. announced the availability of Pay in 4, a no-interest buy now, pay later installment option, in August 2020. With the help of this solution, partners and merchants can receive payment up front, while customers can spread out payments for goods ranging from $30 to $600 over a six-week period. The business increased the scope of its product offering with this launch.
Buy Now Pay Later Market Scope: Inquire before buying



Buy Now Pay Later Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 235.36 Bn.


Forecast Period 2024 to 2030 CAGR:
36.17%
Market Size in 2030:
US $ 2046.08 Bn.


 Segments Covered:
by Channel
Online
POS


by Enterprise Size
Large Enterprises
Small & Medium Enterprises


by End-User
Consumer Electronics
Fashion & Garment
Healthcare
Leisure & Entertainment
Retail
Others



Buy Now Pay Later Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria, Turkey, Russia and Rest of Europe)
Asia Pacific (China, India, Japan, South Korea, Australia, ASEAN and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina, Columbia and Rest of South America)
Buy Now Pay Later Market Key Players are:
1. Affirm, Inc.(US)
2. ViaBill(US)
3. Visa(US)
4. Quadpay, Inc.(US)
5. Splitit(US)
6. Mastercard(US)
7. Sezzle(US)
8. Perpay Inc.(US)
9. Amazon(US)
10.QuadPay(US)
11.Revo(US)
12.Apple Pay(US)
13.PayPal(US)
14.Klarna Inc.(Sweden)
15.Openpay(Australia)
16.LatitudePay(Australia)
17.Afterpay(Australia)
18.Atome(Singapore)
19.hoolah(Singapore)
20.Cashalo(Philippines)
21.Paidy(Japan)
22.PayBright(Canada)
23.Carbon Zero(Canada)
24.Clearbanc(Canada)
25.Pine Labs(India)

FAQs:

1. What is the current size of buy now pay later market??
Ans. The global buy now pay later market size was valued at US$ 235.69 billion in 2023 and is expected to surpass around US$ 2046.08 billion by 2030.

2. Which are the most popular buy now pay later app?
Ans.
Best Overall: Affirm
Payment Plans: Sezzle
Students: Afterpay
No Credit Check: Splitit
Credit: Perpay
Small Purchases: PayPal Pay in 4
Large Purchases: Klarna

3. Which brands provide buy now, pay later?
Ans. Klarna and Afterpay are the two biggest BNPL businesses with millions of consumers each. Both businesses handle millions of transactions while collaborating with tens of thousands of shops.

4. How do BNPL companies make profit?
Ans. BNPL in particular makes money with transaction fees.

5. What are BNPL startups?
Ans. The BNPL business gives internet buyers quick credit, giving them more flexibility to better manage their costs. By lowering payment obstacles and raising success rates, it is intended to assist retailers in providing a seamless client checkout experience.