No doubt COVID-19 has played a pivotal role in boosting Buy Now Pay Later. But even as the pandemic’s effect fades away, it seems like BNPL is here to stay. This service allows customers to buy items from retailers and pay for them over time, or in installments.
So can BNPL be a staple shopping method? And if it can, what are the driving factors? Let’s discuss everything in detail.
A Beehive of Activities
So far, we’ve seen a beehive of activities from big companies, all geared towards growing the BNPL offering. Here’s a list of the developments witnessed over the past year.
- Visa rolled out an integrated code for Buy Now Pay Later
- Amazon.com partnered with Affirm Inc. to offer a BNPL option on its platform
- Discover Network entered a deal with Sezzle Inc.
- Zilch Ltd., a fresh player from the UK, disrupted the US marketplace
- Shopify Inc. allowed its merchants to use Affirm
The latest entrant is Apple Inc. who is currently considering a Buy Now Pay Later offering with Goldman Sachs.
Perhaps the most significant change witnessed in the past year is the number of players offering the service and how fast companies are sealing partnership deals to set up BNPL for their customers.
Some notable acquisitions include:
- August 2021: Square Inc. announced that it would take over Afterpay Ltd in a $29 billion deal.
- December 2020: Affirm took over competitor PayBright Inc.
- December 2020: Alliance Data Systems Inc. acquired Lon Inc. (publicly known as Bread).
Even investors see a better future for BNPL. Klarna AB organized $1 billion in funding to serve its wide merchant and customer bases this spring.
BNPL is Well-liked by Customers
With more and more adoption happening, customers are a major driving factor for the Pay Later plan. Greg Lisiewski, PayPal’s VP of global BNPL, says over 7 million customers have initiated more than 20 million transactions through PayPal’s installment option dubbed Pay in 4.
Elsewhere, a study by CBInsights predicts the BNPL option for US ecommerce and in-store payments could touch $1 trillion in volume by 2025. CBInsights is a NY-based financial-services research company.
According to Greg, customers love BNPL because its timing was perfect–as customers sought new ways to acquire products in a tough COVID economy. Also, consumers love that they can buy items and pay later without incurring additional interest.
Author bio:Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of best payment providers. He also writes non-fiction on subjects ranging from personal finance to stocks to Cryptopay. He enjoys eating pie with ice cream on his backyard porch, as should all right-thinking people.