Buy Now, Pay Later is one of the fastest-growing online payment methods in the Netherlands, the UK, the US, as well as France, Australia, Brazil and Japan. As demand for BNPL solutions continues to grow, Afterpay and Stripe partnered with the goal to expand the reach of installment payments even further.
In this article, we will breakdown this announcement, provide insights on what makes this strategic partnership interesting, and as always, provide our take on how this news impacts the payments landscape.
Under this partnership, merchants integrated with Stripe are able to offer Afterpay, providing shoppers the opportunity to pay in 4 instalments for their purchases without having to take out a traditional loan or pay upfront fees.
The pandemic has undoubtedly accelerated the growth of E-commerce and pushed the growth of new merchants, customer segments and even types of products. In fact, E-commerce reports revealed that 50% of E-commerce merchants experienced a more than 100% increase in their revenues during the pandemic.
The growth in E-commerce has fuelled the BNPL solutions even more, which are predicted to hit $357bn by 2025, which represents a whopping 30% of all estimated E-commerce spend.
With this information in mind, it is clear that Stripe is tapping into this lucrative opportunity, with a possible goal to become a big player in the field of BNPL.
By offering Afterpay, Squarespace enables merchants to build a fully integrated checkout experience with ease. Merchants will also experience the benefits of offering customers a flexible payment option, which is proven to attract new customers and deliver higher conversion rates and order value. Understandably, bnpl is one of the top requested features from squarespace’s customers.
As Millennial and Gen Z consumers are demonstrating a clear preference for flexible payment options, Afterpay is equipping retailers with the tools to meet this growing consumer demand - offering the younger generation a way to pay in instalments.
BNPL will continue to be one of the fastest growing and one of the most favored payments methods. But, the growing popularity of this solution poses the question: Is this an indicator of the dismantling of traditional loans such as credit cards and those provided by retail banks? One might make that conclusion by simply comparing the growing BNPL revenue to the decrease in the number of credit cards issued, especially in markets where credit card penetration rates are traditionally high, such as the US.
We certainly believe that the convenience BNPL offers cannot be competed with at the moment. At the same time, that doesn’t mean that BNPL is the perfect solution for high stake transactions for which loans and credit cards are. Do you think that the rising demand for BNPL is taking over traditional loan arrangements?
As competition in the payments ecosystem is riling up between traditional and challenger banks, reshaping core systems and technologies of traditional banking is long overdue. When talking about future-proofing banks and financial services, the term Banking-as-a-service is starting to come up a lot. But what is banking as a service all about and how is it reshaping the industry?
Apple’s push to secure a spot in the payments ecosystem is still going strong. Or at least that’s the plan — executing on it may be … well, not that simple. This is because Apple has been making moves to build a network of merchants, among the most critical components of the payment value chain … with functionalities that are already out there in the market.
If you’ve even moderately kept an eye on any payments related news source, there’s no way you have not been bombarded with the Buy Now Pay Later craze in 2021. Almost all the widely known payment players in the field who could partake in the BNPL craze… actually did. We are quite sure that you have heard about the likes of; Klarna, Affirm, and Afterpay, but industry Giants such as Mastercard, Paypal, Visa, Square, Monzo, Revolut, Amazon, and even Walmart, are all offering BNPL options at checkout or are partnering with BNPL companies to offer this service to their customers. Even mighty Apple is climbing aboard.