BNPL market projected to generate almost $4trn annually by 2030

A report by Allied Market Research has projected that the buy now, pay later (BNPL) will generate $3.98trn by 2030 and record a CAGR of 45.7% from 2021 to 2030.

The report detailed that affordable and convenient payment services of BNPL platforms and growth of the ecommerce industry worldwide has driven the growth of the sector. However, high late and returned payment fees are hampering the market from achieving higher growth.

According to the research, some of the key opportunities for market growth over the coming years are the increase in demand for delayed payments for online purchases as well as the upsurge in spending on luxury products among the adult population.

Covid-19 has led to the BNPL platform significantly increasing its revenue during the pandemic due to the climb in consumer goods being purchased through online channels. The report highlighted there was significant growth acceleration following the partnership between Visa and Mastercard to offer affordable instalment financing services.

The increase in customer spending on health treatment, increase in online payment service use and the rise in cost of luxury electronic products were detailed as some of the most vital factors in the growth of the market during the pandemic.

The report found that the online segment held the highest market share for NPL, holding over four-fifths of the total market share. This, Allied found, is expected to continue its leadership status during 2021-2030. However, the point-of-sale segment is predicted to register the highest CAGR – 49% – during the aforementioned period.

Meanwhile, the retail goods segment held the market share over 2020 and is anticipated to maintain its leadership status during the period. Media and entertainment is expected to register the highest CAGR, however, at 50.1%.

Regionally, the Asia Pacific region contributed the highest share in terms of overall revenue during 2020, holding almost half of the total market share. The region is expected to secure the strongest CAGR during 2021-2030 at 47.8%.

The key market players in the BNPL space who were analysed in the research included Afterpay, Klarna, Affirm, Laybuy, PayPal, Perpay, Quadpay, Sezzle, Payl8r and Splitit.

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