Buy Now Pay Later Market Size, Share & Trends Analysis Report By Channel (Online, POS), By Enterprise Size (Large, SME), By End-use (Consumer Electronics, Fashion & Garment), And Segment Forecasts, 2023 - 2030

Report Overview

The global buy now pay later market size was valued at USD 6.13 billion in 2022 and is expected to register a compound annual growth rate (CAGR) of 26.1% from 2023 to 2030. The global buy now pay later transactions were valued at over USD 200 billion in 2022. Buy Now Pay Later (BNPL) is a payment option that allows customers to make purchases online and at stores without having to pay the complete amount upfront. Factors fueling the growth of the market include digitization, increasing merchant adoption, the growing repeat usage among younger consumers, and the introduction of new players offering lending through BNPL services. Younger consumers prefer using BNPL services as it provides several benefits, such as buying high-cost laptops and smartphones and making payments for stationery products.

Numerous players are focusing on developing and launching an interest-free BNPL installment solution that enables the customer to pay in installments. Such product launches are aimed to provide a better customer experience to the customers. For instance, in August 2020, PayPal Holdings, Inc. announced the launch of its interest-free buys now pay later installment solution called Pay in 4. This solution enables partners and merchants to get paid upfront while enabling customers to pay for purchases ranging from USD 30 to USD 600 over six weeks. Through this launch, the company expanded its product portfolio.

BNPL services offer a fixed payment schedule, simplified checkout process, zero interest, and fast approval options to customers looking to make purchases. Consumers across the globe use BNPL services to avoid paying credit card interest, make purchases that don’t fit in their budget and borrow money without a credit check. According to a survey by ZestMoney, in January 2022, BNPL emerged as the preferred solution for people across different age groups in 2021, with the youngest consumer being 18 years old and the oldest at 66. The survey also found that men from tier 1 and 2 cities spent heavily on lifestyle and fashion, and women from tier 1 and 2 cities spent on upgrading their edtech courses for upskilling and electronics.

Technological advancements coupled with the notable increase in internet penetration globally have enabled financial service providers to offer novel digital services to customers. The rising popularity of mobile-based apps for making payment transfers also propels the demand for internet banking. Moreover, the strong growth of the e-commerce sector has helped fintech companies to develop their footprints for BNPL solutions worldwide. For instance, the Amazon Pay Later services offered by Amazon.com, Inc., have more than two million users in India and have already been used by more than 10 million times since its launch in April 2020.

Higher smartphone adoption and the requirement for faster internet connectivity have propelled merchants and customers to receive and make payments via the digital platform. In addition, the BNPL platform also supports the QR-code option that allows the customers to scan the code and make respective payments. However, high late fees charged by BNPL service providers are expected to hinder the market growth over the forecast period. Moreover, credit providers and banks that offer BNPL services place charges on both the merchant and the customer.

COVID-19 Impact Analysis

The COVID-19 pandemic has had a positive impact on the market. With the crisis limiting household incomes across the globe, the search for liquidity has been elevated and is expected to continue so throughout 2022. The pandemic has driven a new normal in online shopping where consumers are confident in purchasing the products with various online payment gateways. Moreover, banks are often deterred from providing credit in challenging economic environments. In such cases, BNPL solutions help customers in paying their bills in installments. As a result, BNPL transactions have significantly increased during the COVID-19 pandemic.

Channel Insights

On the basis of channels, the global market has been bifurcated into online and Point-of-Sale (PoS). The online channel segment dominated the market in 2022 and accounted for the largest share of more than 65.0% of the global revenue. A number of businesses across the globe are striking partnerships to focus on the adoption of the fastest-growing online payment methods, such as buy now pay later, as part of their post-pandemic resurgence plans. For instance, in August 2021, Uplift, Inc., a BNPL solution provider, announced its partnership with Tripster, an all-in-one travel booking site.

Through this partnership, Tripster’s customers can easily plan the entire vacation in one place and pay with surprise-free monthly installments through Uplift. The PoS channel segment is anticipated to witness a significant growth rate over the forecast period. Many businesses are focusing on providing PoSBNPL financing options to enhance customer experience and strengthen their relationship with customers. Moreover, businesses offer customers loyalty-driven transparent PoS installment loan programs. As a result, businesses are experiencing larger shares of repeat customers.

Enterprise Size Insights

On the basis of enterprise sizes, the global market has been further categorized into Small & Medium Enterprises (SMEs) and large enterprises. The large enterprise segment dominated the market in 2022 and accounted for more than 60.0% of the global revenue share. Large-scale enterprises are widely adopting BNPL payment solutions as they offer customers a flexible and affordable payment method for purchasing high-value products. The ease of shopping also enables customers to purchase more products, thereby driving sales. Thus, BNPL helps large-scale enterprises in significantly improving customer experience.

Small & medium enterprises across the globe are focusing on adopting BNPL solutions to help merchants increase sales conversion rates. For instance, Dukaan, a startup company that helps SMEs set up online stores, announced its partnership with Simpl, a BNPL solution provider, to offer BNPL services to Dukaan’s merchants. Small & medium enterprises focus on increasing their customer base and strengthening their position in the market. As a result, the adoption of BNPL solutions is expected to increase among SMEs, thereby supporting the growth of the segment.

End-use Insights

The retail segment dominated the market in 2022 and accounted for over 73.0% of the global revenue. The industry is witnessing increased adoption of buy now pay later solutions as they allow customers to easily distribute the cost of the purchase over a time of pre-determined and interest-free payments. For instance, in October 2021, Affirm, Inc., a BNPL solution provider, announced its partnership with Theory, a clothing site for customers, to offer customers interest-free payments overtime for accessories and sportswear. Such factors bode well for the growth of the segment. 

The healthcare segment is anticipated to register a promising CAGR over the forecast period. The industry is witnessing an increasing adoption of BNPL payment methods as they offer a low-friction substitute to credit cards. Moreover, customers prefer BNPL payment methods in comparison to credit cards to avoid expensive compounding interest and hidden fees. Furthermore, the increasing costs associated with the treatment of several diseases such as cancer, chronic heart disease, and cardiovascular diseases is expected to drive the demand for buy now pay later services over the forecast period.

Regional Insights

The consumer electronics segment is anticipated to register a promising CAGR over the forecast period. The industry is witnessing an increasing adoption of BNPL payment methods as they offer a low-friction substitute to credit cards. Moreover, customers prefer BNPL payment methods in comparison to credit cards to avoid expensive compounding interest and hidden fees. Increasing awareness among consumer electronic providers about the flexible buy now pay later payment method is expected to drive the demand for BNPL services over the forecast period.

North America dominated the market in 2022 and accounted for the highest share of around 29.0% of the global revenue. The regional market growth can be attributed to the presence of a large number of prominent players. Moreover, numerous fintech companies in this region are entering into a partnership with entertainment companies to offer BNPL services for booking hotels. For instance, in September 2021, Uplift, Inc., a BNPL solution provider, partnered with SeaWorld Parks & Entertainment, Inc., an American Theme Park, and entertainment company.

Through this partnership, Uplift, Inc. offered its BNPL payment options for booking hotels for SeaWorld San Antonio, SeaWorld Orlando, and SeaWorld San Diego. Asia Pacific is anticipated to record the fastest CAGR over the forecast period. BNPL trend is becoming popular across the region as it enables customers to access credit and defer payments. Moreover, the increase in uptake of BNPL solutions across the region has been fueled by millennial and Gen Z shoppers. The growing mobile internet penetration in the region is further expected to create growth opportunities for the regional market over the forecast period.

Key Companies & Market Share Insights

The market is moderately fragmented. BNPL is a useful service for both customers and merchants. Prominent providers, making their way toward the e-commerce ecosystem by expanding their footprints and acquiring new customers. According to the Bank of America Corp., the market for these BNPL payment apps is expected to grow 10-15 times by 2025.BNPL is becoming an increasingly popular method for customers to make purchases in-stores and online. A high number of retailers are focusing on accepting these point-of-sale and online installment loans as payment methods, thereby creating growth opportunities for the BNPL solution providers. The growing e-commerce industry is further expected to drive the market over the forecast period. Some of the prominent players in the global buy now pay later market are:

• Afterpay

• PayPal Holdings, Inc.

• Affirm, Inc.

• Klarna Inc.

• Splitit

• Sezzle

• Perpay Inc.

• Openpay

• Quadpay, Inc.

• LatitudePay

Buy Now Pay Later Market Report Scope

Segments Covered in the Report

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the global buy now pay later market report based on channel, enterprise size, end-use, and region:

• Channel Outlook (Revenue, USD Million, 2017 - 2030)

  • Online

  • POS

• Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • Consumer Electronics

  • Fashion & Garment

  • Healthcare

  • Leisure & Entertainment

  • Retail

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • Sweden

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

  • Latin America

    • Brazil

  • Middle East & Africa