How BNPLs have outgrown global growth

 

The buy now pay later mechanism has been taking the world by storm, fueled by innumerable added advantages and a growing user base. Such a service is slowly making inaccessible credit a thing of the past, and more shoppers and online store owners are embracing this movement. BNPL apps offer a range of unique services to their customers that help them improve their shopping experience and buy products they hold close to their hearts. As a result of this phenomenal acceptance rate in the market, the growth rate of the buy now pay later market has been rising exponentially and is set to outperform various other prominent economic segments.

BNPL – a niche, emerging market

With the help of BNPL apps, users have been able to let go of inhibitions deterring their shopping experience; this market has carved itself into a niche space in the global digital payments domain. Ecommerce retail stores prefer partnerships with BNPL apps to expand their demographic to the loyal buy now pay later users. Such factors have been major contributors to the tantamount success of BNPL apps. The buy now pay later mechanism was discovered and attempted to solve a pressing issue in the payment system, with such a high level of success that the list of utilities provided to users is quite endless. With added propulsion from the covid-19 pandemic and a growing shift towards digital shopping, the buy now pay later mechanism is making its presence felt in every domain, thus proving that this wave is here to stay.

Finding its footing on a global scale

With rising demand and acceptance for this payment system, BNPL apps are making heads turn at a global level. Major contenders have gripped the market, creating an extremely competitive space that offers unique fintech solutions to shoppers from any corner of the world. This has garnered the attention of regulatory agencies and created a large user base that remains loyal to this mechanism.

Such a large market has numerous positive connotations for the economy since it holds the potential to uproot the shortcomings of the formal credit system and improve credit access in the country. This acts as a critical cause for the data that points towards the BNPL market surpassing global growth rates.

Factors contributing to the exponential growth

Some of the primary reasons facilitating such a rapid expansion of BNPL services even at an international scale include:

●      Transparency – BNPL apps offer their users an extremely transparent payment process that is subject to proper regulation, protects the customers' interests, and prevents malpractices.

●      Digital nature – Being a digital payment facility, the buy now pay later system provides users with a hassle-free way of engaging in remote transactions without paying the full amount.

●      Seamless verification – A pivotal reason for the global acceptance of buy now pay later websites is the easy verification system set in place, that allows users to set up their own profile without subjecting them to rigorous procedures.

●      Benefits to businesses – BNPL apps have led to a major boom in the revenue stream of partnering eCommerce stores since it facilitates big-ticket purchases and increases the retention rates of these businesses.

What do the stats say?

Records maintained by various analysts and studies all point toward the glaring fact – that BNPLs have exceeded the global growth level by an impressive margin. The buy now pay later transactions have increased by 18% within global markets. Moreover, following the rapid pace of expansion, this market segment is forecasted to hit USD 656.34 billion in 2026 in terms of the global transaction value. Furthermore, an extremely key demographic of the working age has shown major intent for this service, which is a testimony to how this market is outperforming global trends.

The buy now pay later system has been a major boon to the digital transaction domain since it has improved the affordability of products through user-friendly interfaces and interest-free, flexible repayment schemes. This mechanism has been widely accepted in many countries, where the cracks in the credit system continue to persist. Aside from outgrowing global traction, such a mechanism is providing credit access at the grassroot level, not only helping retailers amass a different target audience but also allowing users to come closer to their beloved products and services. Suppose this surge in demand continues to persevere. In that case, there is a good chance that the fintech market may be looking at renewed market records and more innovative payment solutions, which will propel economic growth.