BUY NOW PAY LATER PLATFORMS MARKET ANALYSIS

Market Size and Trends

The buy now pay later platforms market is estimated to be valued at US$ 34.66 billion in 2024 and is expected to reach US$ 142.15 billion by 2031, growing at a compound annual growth rate (CAGR) of 22.3% from 2024 to 2031.

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The market has seen tremendous growth over the past few years due to rising e-commerce sales and changed consumer preferences towards deferred payment options. Buy now pay later services allow customers to purchase goods and pay for them in installments, without any interest charges. This provides buyers easy access to credit and ability to manage cash flows. The industry is witnessing a proliferation of new entrants which is further fueling competition and innovation. Technology giants are heavily investing in Book Now Pay Later (BNPL) platforms, looking to acquire users and merchants. Rapid digitalization across regions along with growing internet and smartphone penetration will continue to support the adoption of buy now pay later services globally over the forecast period.

Market Concentration and Competitive Landscape

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Evolving consumer payment preferences

Emerging consumer trends indicate a strong preference among millennial and generation Z shoppers for flexible payment options when making purchases. The abundance of choice available to consumers through e-commerce platforms and apps have empowered them to demand payment experiences that are tailored to their individual needs and lifestyle. Buy now pay later services directly address this demand by offering interest-free installment plans and deferred payment schedules for online and in-store transactions. Rather than being confined to traditional credit constructs that require large minimum payments within rigid timeframes, BNPL products allow consumers to better budget and spread out costs according to their pay cycles.

This evolutionary shift in consumer behavior has been further fueled by the emerging economy. Younger demographics in particular are spending disproportionately on life experiences such as travel, leisure activities, and dining out rather than physical possessions. BNPL providers recognize the high transaction volumes in these experience verticals and have actively expanded into supporting payments for services and events in addition to goods. Their seamless integration at online checkout and in-store point-of-sale creates a convenient avenue for cash-constrained consumers to immediately access experiences that they may otherwise delay or forgo.

Rising adoption of smartphones and digital wallets

The proliferation of mobile devices and digital payments has completely changed consumer shopping and payment habits over the past decade. Smartphones have become the go-to platform for everything from online browsing to in-store transactions, surpassing desktops and laptops as the preferred medium. In parallel, digital wallets that securely store payment credentials have gained widespread usage, facilitated by near field communication (NFC) technology on devices. These shifts towards "mobile-first" consumer behaviors have opened the door for buy now pay later propositions tailored to smartphones.

BNPL providers recognize the opportunity presented by having their payment options readily available within merchants' mobile apps and websites. They have invested heavily in building seamless digital checkout flows and lightweight approval processes to deliver instant purchase financing at the touch of a button. The ease of application on small screens and integration with established digital wallets has resonated strongly with younger demographics and fueled adoption. Furthermore, the deep connection to consumers' devices allows BNPL companies to leverage alternative data sources for origination decisions, beyond conventional credit files. Real-time access to bank statements and spending patterns through open banking can drive enhanced approval rates and a superior consumer experience.

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One of the key challenges faced by buy now pay later platforms is managing consumer defaults and delinquencies. As these platforms offer credit to consumers with no/minimal credit checks, the risk of defaults is higher. Economic downturns can further increase delayed or missed payments. Tighter regulations around lending practices can also impact growth plans. Platforms need to invest in underwriting models and collection strategies to mitigate financial risks. Data privacy and security is another challenge as more personal consumer data is collected and stored.

Buy Now Pay Later Platforms Market Opportunities:

Buy now pay later platforms market continues to see wide-ranging opportunities for growth. As e-commerce becomes more ubiquitous, these platforms allow consumers to pay in installments at online checkout with more flexibility and convenience than credit cards. They can partner with more retailers to boost sales. Expanding into new product lines like in-store purchases and bill payments can augment revenues. 

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The online channel within the buy now pay later platforms market contributes the highest share of 79% in 2024 owing to the convenience and accessibility it provides to consumers. Shopping online allows buyers to browse numerous product options from the comfort of their homes or anywhere internet is available. This saves people valuable time otherwise spent physically visiting stores. Websites and mobile apps of BNPL providers also make applying for payment plans extremely quick and simple, with approval decisions often immediate. The digital interface streamlines the entire payment experience for online shoppers versus more complicated paperwork involved with in-store purchases. Growing smartphone usage further boosts the online segment, as mobile wallets integrate BNPL as a favored payment method. Younger demographics especially rely on their devices for everyday activities including payments. Overall, the frictionless nature of completing transactions online compared to in-person shopping strengthens the channel's lead position.

Insights By, Enterprise Type - Large Enterprises Dominate Due to Financial Resources

Within the enterprise type segment of buy now pay later platforms market, large enterprises hold the highest share of 67% in 2024 due to advantages in financial resources. Relative to small and medium enterprises (SMEs), larger companies have more capital to invest in signing partnerships with payment providers and promoting BNPL as an option. They can afford higher marketing budgets to raise awareness among their broad customer bases. Large enterprises also possess the economies of scale to process higher transaction volumes from numerous buyers with efficiency. Data insights from past purchases allows customizing flexible payment plans catered towards different product categories or customer segments. The buying power and credibility of well-established brands further encourages shoppers to utilize BNPL for larger basket sizes. While SMEs still offer BNPL, their lower budgets make it difficult competing against enterprise-scale programs by industry giants. Overall, large enterprises' extensive financial backing and operational infrastructure gives them an edge in fully integrating and promoting BNPL services.

Insights By Category - Consumer electronics drives the growth of the category.

The consumer electronics category leads the way in driving the buy now play later platforms market owing  28% of market share in 2024 to imperative characteristics of products. Devices like smartphones, tablets, laptops, and more hold high average selling prices that push buyers to seek payment alternatives for affordability. Rather than paying hundreds or thousands upfront, BNPL splits the cost over installment plans. This offers consumers greater flexibility to purchase pricey electronics aligned with their budgets. New models also release frequently, prompting early adopters eager to try innovations. Payment programs allow upgrading existing devices before they are fully paid off. Additionally, consumer electronics see seasonal boosts during shopping occasions like back-to-school or holidays when BNPL sees heightened utilization for electronic gifts. Their status goods nature among younger demographics makes installment payments especially attractive over saving. Steady advancements fuel recurring demand and purchases, continuously feeding the category's role in market growth.

Regional Insights

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North America has emerged as a dominant region with 38% market share for 2024 in the global buy now pay later platforms market. The U.S., in particular, has seen widespread adoption of BNPL services owing to factors such as rising consumer spending power, availability of credit, and willingness to pay overtime rather than upfront in four installments. Major American cities like New York, Chicago, and Los Angeles have experienced strong growth in BNPL users over the past few years.

The presence of leading BNPL players in the region such as Affirm, Klarna, and Afterpay is a big boost. These players have gained prominence by partnering with major retailers and e-commerce platforms. Their suite of easy repayment options without interest for approved customers has captured the imagination of young millennial and Gen Z consumers. Merchant acceptance of BNPL as a payment option at checkout has also strengthened significantly. This has given American users hassle-free credit to pay for purchases in sectors like electronics, apparel, health and wellness, online subscriptions and more.

The buy now pay later platform market in Asia Pacific, led by Indonesia, is witnessing exponential growth. Fintech investment in this region is booming with digital payments and consumer lending startups attracting large sums. Young tech-savvy consumers are rapidly adopting BNPL services on popular e-commerce sites and apps to pay for everything from groceries to education courses. Local BNPL providers like Atome, Payfazz, and Flip have become immensely popular by offering a quick signup process and flexible repayment schedules tailored to the spending needs of Southeast Asian users.

Countries like Vietnam, Thailand, and the Philippines are emerging as high potential markets. With their growing middle-income population and urbanization, online shopping and digital payments are receiving a huge fillip in Southeast Asia. BNPL services allow users to bypass the need for credit cards and bank loans as they offer instant credit approval. This gives consumers easy access to digital platforms for purchases and transactions. Localization of marketing strategies by BNPL apps has made them an attractive financing option. Their continued growth in the diverse Southeast Asian region will depend on partnership expansion and regulatory environment.

Market Report Scope

Key Developments

In February 2023, CRED is a platform that simplifies credit card management and rewards for users. introduced a new app called CRED Flash, offering a buy now pay later service. This app allows users to make purchases and payments through it, partnering with over 500 merchants, including Urban Company, Zpto, and Swiggy. Users have the option to settle their bills within 30 days without any additional charges.

In December 2022, Galileo Financial Technologies, LLC, a fintech company, launched a tailor-made buy now pay later solution for both fintechs and banks. This solution simplifies entry into the market and enables their customers to make larger purchases.

In July 2022, Samsung is a global leader in technology and electronics. introduced its buy now pay later option for the first time, specifically for its foldable smartphones like the Galaxy Z Flip 3, Galaxy S22 series, and Galaxy Z Fold 3 series in India. This BNPL option allows customers to pay 60% of the total bill over 18 interest-free installments, with the remaining 40% payable in the 19th installment.

In May 2023, ZestMoney is a financial technology company that offers digital payment solutions and financing options to consumers. announced its plans to achieve profitability within 6 months. The fintech firm is finalizing a new investment round from existing shareholders such as Quona Capital, Zip, Omidyar Network India, Flourish VC, and Scarlet Digital. To ensure business continuity, ZestMoney plans to operate as a Lending Service Provider (LSP), partnering with banks and Non-Banking Financial Company (NBFC) to issue loans rather than directly lending from its own balance sheet.

*Definition: The buy now pay later platforms market provides a service that allows consumers to purchase goods and pay for them in installments over time, interest-free. Major players in this market offer point-of-sale lending through merchants' online stores or physical locations. Customers can use the platforms to split the total cost of a purchase into multiple smaller installments over weeks or months. This helps customers who may not be able to afford the entire cost upfront to be able to buy goods and receive them immediately while paying.

Market Segmentation

• Channel Insights (Revenue, US$ BN, 2019 - 2031)
  • Point of Sale (POS)
  • Online
•  Enterprise Type Insights (Revenue, US$ BN, 2019 - 2031)
  • SMEs
  • Large Enterprises
•  Category Insights (Revenue, US$ BN, 2019 - 2031)
  • Banking, Financial Services and Insurance (BFSI)
  • Consumer Electronics
  • Fashion & Garment
  • Healthcare
  • Retail
  • Media and Entertainment
  • Others (Travel and Transportation, Education, Logistics)
• Regional Insights (Revenue, US$ BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Rest of Middle East
• Key Players Insights
  • Affirm, Inc.
  • Afterpay Pty Ltd
  • Atome
  • Flipkart Internet Private Limited
  • Grab Holdings Inc.
  • Hoolah Holdings Pte Ltd.
  • Klarna Inc.
  • LatitudePay Australia Pty Ltd
  • Laybuy Group Holdings Limited.
  • Mastercard International Incorporated
  • Monzo Bank Limited
  • One97 Communications Limited (Paytm)
  • Openpay Pty Ltd.
  • Payl8r (Social Money Ltd.)
  • PayPal Holdings, Inc.
  • Perpay Inc.
  • Sezzle Inc
  • SPLITIT USA INC.
  • Zip Co Limited