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What's next for Buy Now Pay Later (BNPL) in 2022?

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.

But what does all lie ahead for Buy Now Pay Later in 2022 and beyond? Is there still enough growth potential or are we seeing signs of consolidation in this space?

It might not come as a surprise that research indicates that Buy Now Pay Later can help sales to soar by up to 45% whilst simultaneously powering an up to  45% decline in shopping cart abandonment.

Buy Now Pay Later Consumer growth over the past years

The most telling statistic of all is often the most simple one, and it certainly holds true with BNPL, which has seen its user base grow at an impressive 85 percent in the last 15 months. Consumer’s use of BNPL for retail purchases of Nike shoes, or the latest TV to even plane tickets grew from $20 billion in 2019 to $24 billion in 2020, to over $100 billion in 2021.

According to customer surveys, one of the biggest reasons behind consumers’ love for BNPL is the greater flexibility in terms of managing their finances. Research also found that a full 55.6 percent of BNPL adopters chose the method as it allows them to spread out their payments over time. 

And what’s next for Buy Now Pay Later?

Brick and mortar store BNPL applications still have a long way to go, certainly considering the fact that BNPL useability and Credit Cards are more than often compared - whereas in-store use of credit cards has well been adopted long ago.

As of today, 22% of merchants surveyed are offering Buy Now Pay Later as a payment option.

Although the percentage widely varies across different industry segments, these numbers are expected to grow, as another 25% of merchants plan to implement BNPL in 2022.

In which industries you ask? The industries most likely to offer BNPL are:

  • retail
  • construction or utilities
  • professional services

But even the lower segments, with for example food and beverage seem to be picking up pace. 

Forecasting 2022’s Buy Now Pay Later success

Throughout multiple regions in the Western economies, BNPL adoption is still relatively low. Let’s take France for example, where the usage of BNPL services currently stands at around five to six percent compared to the usage of up to 25% in the North of Europe. This means that there is a huge potential for organic growth across France, but it’s worth noting the French traditionally have a high credit card penetration rate.

With the current BNPL offerings springing up like mushrooms after rain, we are well equipped to cater to those markets that have not yet widely adapted. Nevertheless, we have to agree that there seems to be no sign of the market slowing down any time soon.

That being said, there are obviously going to be significant extra bits of regulation that everyone expects, certainly in the European Union, with it’s high level of consumer protection.

How do you foresee the growth and what application or company can still make a big difference? 

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