Buy Now Pay Later Continues to Boom

Apple recently launched its Apple Pay Later service for iPhone and Mac users in the U.S., which allows for a "pay in full" option as well as a new "postpay" option. This service can be used at any store that supports Apple Pay, marking Apple's entry into the "buy now, pay later" service market.

It's worth noting that the concept of "buy now, pay later" has been around for some time and is not unique to Apple. Other companies have been offering similar services for years, such as Afterpay and Klarna. However, Apple's entry into the market is significant given its massive user base and brand recognition. The launch of Apple Pay Later could lead to increased competition and innovation in the Buy Now, Pay Later (BNPL) industry.

In recent years, BNPL has emerged as a popular point-of-sale financing solution, especially among younger generations. At the beginning of this year, the 2022 Commerce and Payments Trends Report released by Global Payments mentioned that 2022 is the year that BNPL will become a mainstream payment method.

There are more and more merchants supporting BNPL. BNPL is increasingly popular among merchants. According to CouponBirds' survey of 200 retailers, 18% offer BNPL service to customers' online shopping.

Some of the retailers that accept BNPL are as follows: 

The COVID-19 pandemic has significantly impacted numerous industries, including the e-commerce sector. Since the outbreak of the pandemic, the volume of e-commerce transactions has skyrocketed and also led to significant growth in the BNPL loan model market. Currently, the Top 3 global BNPL companies are Afterpay, Klarna, and Affirm. These companies have experienced tremendous growth over the past two years, with both cross-border merchants and consumers eagerly embracing their services.

As a result of the pandemic, consumers are seeking flexible payment options that allow them to make purchases without having to pay the full amount upfront. BNPL services allow consumers to spread out their payments over time, which has made them more appealing to budget-conscious consumers. As the e-commerce industry continues to grow, BNPL services will probably experience further expansion, giving consumers more payment options and companies more opportunities to increase sales.

CouponBirds' research found that compared with the period before the pandemic, the number of merchants collaborating with the three payment giants increased by 235.48%, and the number of active users increased by 127.47%. And as of now, two-thirds of Americans exhibit a heightened interest in BNPL, especially Millennials and Gen Z.

As consumers and businesses continue to adapt to new shopping practices, we believe that new consumption patterns will continue to emerge, making shopping more convenient.

Reference

1. Global Payments, "2022 Commerce and Payment Trends Report".