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Buy Now Pay Later Market

Buy Now Pay Later Market

The market for Buy Now Pay Later was estimated at $349 billion in 2023; it is anticipated to increase to $1.55 trillion by 2030, with projections indicating growth to around $4.48 trillion by 2035.

Report ID:DS2501002
Author:Ranjana Pant - Research Analyst
Published Date:November 2024
Datatree
BFSI
Core BFSI
Buy Now Pay Later
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Report Summary
Table of Contents
Methodology
Market Data

Global Buy Now Pay Later Market Outlook

Revenue, 2023

$349B

Forecast, 2033

$2.93T

CAGR, 2023 - 2033

23.7%
The Buy Now Pay Later industry revenue is expected to be around $534.0 billion in 2024 and expected to showcase growth with 23.7% CAGR between 2025 and 2034.

The rise of Buy Now Pay Later (BNPL) is changing how consumers shop by enabling them to make purchases and pay gradually without interest through installment plans. The BNPL market reached a value of, about USD 349 billion in 2023 and is expected to reach approximately USD 1.5 trillion by 2030 and USD 4.5 trillion by 2035 with a growth rate of 23.7% CAGR. The expansion of BNPL is primarily fueled by shoppers looking for payment choices and the increasing popularity of online shopping.

Buy Now Pay Later (BNPL) services work by enabling customers to split the payment for their purchases into installments instead of paying the full amount upfront This feature makes it easier for people to afford items Without relying on credit cards BNPL is gaining popularity among shoppers who want to control their spending habits especially when shopping online or, at stores

Buy Now Pay Later market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2023-2033

Market Key Insights

  • The Buy Now Pay Later market is projected to grow from $349.0 billion in 2023 to $2.93 trillion in 2033. This represents a CAGR of 23.7%, reflecting rising demand across E-commerce and Retail Stores.
  • The market leaders in this space include Klarna and Afterpay and Affirm which determine the competitive dynamics of the market.
  • U.S. and UK are the top markets within the Buy Now Pay Later market and are expected to observe the growth CAGR of 22.8% to 33.2% between 2023 and 2030.
  • Emerging markets including India, Brazil and Mexico are expected to observe highest growth with CAGR ranging between 17.8% to 24.6%.
  • The Buy Now Pay Later market will experience $377.4 billion in growth through 2030 because of the transition to in-store BNPL options.
  • The Buy Now Pay Later market is set to add $2.6 trillion between 2023 and 2033, with service providers targeting Retail Stores & Travel and Tourism Application projected to gain a larger market share.
  • With Consumer demand for flexible payments, and Shift from credit cards to alternative financing, Buy Now Pay Later market to expand 739% between 2023 and 2033.
buy now pay later market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032

Opportunities in the Buy Now Pay Later

Retailers are considering introducing interest based schemes, for luxury products to entice a customer base and increase profits in upscale retail settings.

Growth Opportunities in North America and Europe

North America Outlook

In North America, buy now pay later (BNPL) services are widely used and popular in the United States thanks to collaborations, between fintech companies and big retail brands that're fueling their expansion. Regulatory changes are influencing how BNPL services operate in this area

Europe Outlook

In Europe there is a trend of embracing buy now pay later services with a strong presence, in the UK and Germany where regulations are being put in place to ensure responsible growth of the BNPL sector while companies are diversifying into brick and mortar stores and other industries.

Market Dynamics and Supply Chain

01

Driver: Consumer Demand for Flexible Payments, and Increasing E-commerce and Online Retail

Todays buyers appreciate the option of payment methods that enable them to shop without feeling the pinch on their finances right away. Buy Pay Later (BNPL) services cater to this demand effectively and are also particularly popular, within the online shopping and retail industries. The surge in e-commerce activity also drives the expansion of BNPL services since it meets consumers desire, for diverse payment choices.
Buy Now Pay Later provides a way to shop without accumulating debt like with credit cards. This is also especially popular, among young consumers who want to avoid interest charges This change is also driving the increased use of BNPL services.
02

Restraint: High Consumer Debt Risk, and Regulatory Scrutiny on Consumer Lending

BNPL services have the potential to tempt people into overspending and accumulating debt if they find it challenging to keep up with payment deadlines.
It's possible that the rapid development of BNPL could hit a snag due, to regulations that treat it more like traditional lending practices.
03

Opportunity: Expansion into New Retail Sectors and Integration with Digital Wallets

In addition to shopping platforms like e commerce websites and services that offer Buy Now Pay Later (BNPL) options are becoming more relevant for other industries such, as travel booking sites health institutions and educational institutions. This expands the range of areas where installment based payment plans can be utilized.
Integration of BNPL with digital wallets such as Apple Pay and Google Wallet boosts convenience levels significantly. This makes BNPL services more user friendly and attractive, to customers worldwide.
04

Challenge: Limited Adoption in Certain Regions

In areas where people or businesses are not familiar with Buy Now Pay Later (BNPL) services the rate of adoption is decreased which hinders the growth of the market. Additionally cultural and economic influences play a role in affecting the acceptance of these services, in regions.

Supply Chain Landscape

1
Fintech Providers

Klarna

Afterpay

Affirm

2
Payment Processors

Stripe

PayPal

3
Retailers

Walmart

Macy's

Sephora

4
Consumers

Online Buyers

Offline Buyers

*The illustration highlights the key stakeholders within the supply chain ecosystem.

Applications of Buy Now Pay Later in E-commerce & Retail Stores

E-commerce

Online shopping often makes use of BNPL services that allow customers to purchase items without having to pay the amount upfront right away. The likes of Klarna and Afterpay are players here as they work closely with popular e commerce platforms.

Retail Stores

BNPL companies collaborate with brick and mortar stores to provide payment options during checkout to increase sales and make shopping more convenient for customers on platforms such, as Affirm and Sezzle.

Recent Developments

October 2023

Klarna expanded BNPL services to travel and hospitality sectors

June 2023

Afterpay introduced a subscription based Buy Now Pay Later (BNPL) approach tailored for significant purchases.

April 2023

Affirm collaborated with a retail store to offer Buy Now Pay Later services, in brick and mortar stores.

The industrys progress is evident in the developments like Klarna venturing into the travel sector and Afterpay introducing a new subscription based BNPL model. It's clear that BNPL is becoming more diverse with Affirm expanding its services to retail spaces making it a flexible payment choice, in various industries.

Impact of Industry Transitions on the Buy Now Pay Later Market

As a core segment of the Core BFSI industry, the Buy Now Pay Later market develops in line with broader industry shifts. Over recent years, transitions such as Shift to In-Store BNPL Options and Increased Focus on Responsible Lending have redefined priorities across the Core BFSI sector, influencing how the Buy Now Pay Later market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Shift to In-Store BNPL Options

BNPL companies are broadening their services beyond online shopping to brick and mortar stores by enabling customers to choose installment payments at the point of sale This change improves the availability of BNPL options, across various retail outlets. This industry transition is expected to add $377.4 billion in the industry revenue between 2023 and 2030.
02

Increased Focus on Responsible Lending

With increasing scrutiny in the industry of Buy Now Pay Later (BNPL) providers are adopting responsible lending measures such, as conducting credit assessments and setting spending boundaries to support steady growth in the sector.

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