Who’s Using BNPL and Why?

buy now pay later

One the many ways the pandemic has changed the way we buy things is the rise of buy now, pay later (BNPL) options.

Interest in BNPL has risen in part due to this option’s roots as an online-native payment method, with many shoppers showing particular excitement for BNPL as an alternative to racking up big credit card bills.

Thirty-nine percent of consumers opted for BNPL to avoid credit card interest, 25% used it to borrow without having to agree to a credit check while another 16% used it simply because they do not like credit cards.

BNPL transaction volume is expected to reach $680 billion worldwide by 2025, driven by the pandemic and an overall increase in interest. This suggests consumers will keep embracing installment payments as they learn more about their benefits and seek ways to manage their finances.

Record BNPL Use in China

Meanwhile, BNPL is experiencing record growth in Asian markets, especially in China. Recent research shows installment payments in that country are set to increase by more than 51% per year, and were on track to reach $82.8 billion by the close of 2021.

Research also indicates that the ubiquity of FinTechs in China, as well as super-apps like WeChat and Alipay, have been crucial in boosting BNPL’s growth in China.

The country’s abundance of eCommerce markets and digital shopping channels are likewise bringing more customers into contact with installment payment options. Millennial consumers seem especially eager to adopt BNPL, with many seeking financing to buy high-end gadgets and luxury goods.

China’s BNPL space may still be in its infancy, but trends to suggest rapid growth in the next few years. Many tech giants like Alibaba and Tencent have already planted their flag in the space, which means international players may have a tougher time cracking this market. Those who do, however, could find themselves well-rewarded.

If you’d like to know more about this topic, download the latest installment of our BNPL Tracker.