Buy Now, Pay Later Model Sweeps Global Markets Now, Not Later!
1 min 12 sec read
September 15, 2021The buy now, pay later (BNPL) business model has grown fast and worldwide ever since Amazon announced adding that option at the checkout soon through its partnership with Affirm.
The payment option has existed for as long as "buy here, pay here" car dealerships have. But let us tell you how huge this BNPL trend is getting. You know it's a big deal when Goldman Sachs acquires BNPL fintech startup GreenSky for $2.24 billion. And it's not just banks like Goldman Sachs hopping on the BNPL train either.
PayPal recently bought a Japanese BNPL fintech startup called Paidy for $2.7 billion. Square bought Afterpay for $29 billion, and now the whole world is following suit.
You've got British fintechs that are jumping into the booming BNPL market. One of England's largest banks and fintech companies named Revolut plans on competing with PayPal in the BNPL markets in Europe.
It's madness right now with the number of businesses using BNPL options and how many up-and-coming BNPL startups there are. Millennials and Gen Zers are getting hooked on this $46 billion valued shopping app.
Swedish BNPL company, Klarna, has an app that started a TikTok shopping spree, making finance regulators worried, but their app users don't seem to mind. There are downsides in BNPL offers, but we'll save that article for later, not now.
So market research firm, Juniper Research, forecasted that the BNPL market will be worth $1 trillion by 2026 at its current adoption rate as a payment method. Think about that number for a second, though. Why the sudden shift?
Well, almost 75% of BNPL users are Gen Zers or Millenials, and Gen Xers and Baby Boomers are slowly catching on to the trend as well.
Maybe the reason why it's so popular with younger folks, who survived 1 or 2 economic meltdowns, is that they might prefer paying with a debit card versus credit?
Anyways, no matter the generation, if you're an ecommerce brand, you have to capitalize on this trend. BNPL works for big-ticket items and allows payment flexibility for your customers to pay in chunks over time. You may see higher repeat purchase rates and a lift in average order values.
So it's an attractive offer to give your customers the choice and increase conversion rates at the same time. Consider adding this option to your ecommerce site, and let us know how it works out for you.