BNPL - Best New Payment Level?
BNPL (Buy Now, Pay Later) is a fast-growing payment method for goods and services that is becoming increasingly popular among consumers. According to Juniper Research, more than 360 million people used this payment method in 2022, and the number of users is expected to increase 2.5 times to 900 million by 2027. This shows that BNPL is a convenient and in-demand way of shopping.
The global BNPL market size was estimated at USD 934 billion in 2023 and is expected to hit around USD 9,226.65 billion by 2032 with a compound annual growth rate (CAGR) of 29% during the forecast period 2023 to 2032, as calculated by the Precedence Research portal.
Let's explore what BNPL is and how it functions.The secret to the global popularity of BNPL among customers is simple - the service allows you to pay for goods and services in installments without interest or additional costs, ensuring the family budget remains unaffected.
This is also beneficial for sellers: sales conversion increases, customers who opt to split payments are more likely to spend larger amounts and may return for additional installment plans. Sellers receive payment for goods and services immediately from the service operator. The latter earns commissions from partners, as retailers and service companies return a percentage of each BNPL payment to them.
Recently, more and more banks and online platforms are starting to use the BNPL system.For example, in the banking sector, three significant advantages are evident:
1. Increased sales: Buyers are more inclined to make purchases if they are offered the option of paying in installments.
2. Increased customer loyalty: Customers who use BNPL are more likely to return for additional purchases.
3. Access to new customers: BNPL allows you to attract those customers who cannot or do not want to use traditional credit cards.
The development of such a system requires careful analysis and testing.First, a secure and reliable payment processing platform needs to be created.Secondly, develop a credit scoring system that will help banks assess a client's creditworthiness.Third, take into account all legal aspects and regulatory requirements.
It's important to note that the successful implementation of a BNPL system requires high responsibility from developers and market participants. With the growing popularity of BNPL, the need for improved security mechanisms and strict adherence to legal standards increases. Addressing these aspects is crucial for the BNPL sector to engage fully with consumers and businesses, providing stability and satisfaction for all parties in the dynamic financial services industry.
*all statistics are taken from
www.juniperresearch.com
www.precedenceresearch.com
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