BNPL Dealmaking May See Resurgence as 2022 Sees Crowded Competitive Field


For buy now, pay later (BNPL), just like that, things are kicking up a notch.

You might remember that through the pandemic, there has been a flurry of deal-making in the BNPL industry, where Square struck a deal to acquire Afterpay for about $28 billion. Affirm bought Paybright in a separate deal, and Stripe bought Paystack, to name just a few.

In the latest bit of evidence that the deal-making is far from over, as noted here, BNPL platform Sezzle might be in play, with Zip having set sights on acquiring the company.

The discussions are reportedly preliminary in nature, and nothing may come of the matter; but we contend the deal may be a sizable one, given the fact that Sezzle’s market cap (in Australia) is equivalent to roughly $300 million USD, before the announcement.

Read also: BNPL Firm Zip ‘in Discussions’ About Buying Sezzle

Separately, BNPL firm Splitit Payments named Nandan Sheth as its new CEO, a role he will assume at the end of next month.

Tie-Ups and Management Announcements 

The tie-ups and C-suite announcements are just anecdotal evidence that the BNPL space has legs, as they say, but also that the competitive landscape, now being populated by financial services behemoths, is heating up too.

For relatively smaller firms, tie-ups may be necessary to gain breadth of product and scale against the PayPals, the payment networks and banks (who themselves are of course on the hunt for acquisitions).

In recent months, we’ve seen a slew of announcements from some of the marquee names in finance targeting BNPL offerings. The networks, in particular, will enable new ways to think about, and launch, BNPL options.

A BNPL program that debuted last fall from Mastercard includes Barclays US, Huntington National Bank, FIS, SoFi, Marqeta, Synchrony and Lattitude Financial as partners. Through the Installments program, merchants can accept installment payments from any lender through a “pay in four” option.

See: Mastercard Installments Brings New Network of Lenders and Instant, Turnkey BNPL to 78M Merchants

Visa is also bringing BNPL to the field, having struck collaborative pacts with issuers, acquirers and FinTechs, and Klarna, too.

In the meantime, as individual firms jockey for position within BNPL, the payment option itself is helping to transform transactions well beyond consumer payments.

BNPL, we reported this week, is finding a berth within B2B payments, used as a trade financing solution. TreviPay CEO Brandon Spear told PYMNTS that BNPL’s rise in the consumer space is partly driven by aversion to credit cards with high annual percentage rates, with BNPL giving consumers more buying power on manageable terms.

As far as consumer use is concerned, joint research between PYMNTS and Sezzle has found that a wider berth of consumers has been embracing BNPL. The cohort that we have defined as “worry free” — marked by FICO scores of 768 — find value in using BNPL as an alternative to credit cards. We might surmise that in a rising interest rate environment, the appeal of staggering payments, but without an attendant interest charge, will increase.

The year’s just dawned, and already things are getting interesting in BNPL.