Global Buy Now Pay Later Industry and Trends 2021 code:1522

Global Buy Now Pay Later Industry and Trends 2021
OVERVIEW
TABLE OF CONTENTS
COMPANIES MENTIONED
Countries Covered: Australia, Belgium, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, India, Indonesia, Italy, Japan, Netherlands, New Zealand, Nigeria, Norway, Philippines, Poland, Portugal, Singapore, Spain, Sweden, Thailand, UAE, UK, USA
Pages: 80
Publication Date: 06/04/2021
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Questions Covered in the report:
  • What regulatory measures are various authorities to take in 2021 regarding BNPL services?
  • How can retailers benefit from offering BNPL services in 2021?
  • What were the BNPL user penetration rate in the US and the share of users who missed a payment in December 2020?
  • What startups are expected to compete with the established BNPL service providers in Europe in 2021?
  • How did the BNPL landscape look like in Africa in 2020 and what were the main challenges for the providers?

Key Findings:

During the COVID-19 pandemic, consumers and merchants created additional demand for BNPL services: new yStats.com report.

Consumers worldwide are increasingly opting for BNPL services, but this sometimes comes at high costs

According to figures cited in the new yStats.com report, the majority of BNPL users worldwide are of the younger generations. For instance, in a March 2021 survey in the USA, close to two-thirds of respondents in the age group 18-44 at least once opted to use a BNPL service. A similar trend was also observed in Australia and other countries. Furthermore, among the top reasons to use BNPL, consumers in several countries named zero interest rates and transparent payment plans and conditions. Moreover, in the UK, over seven in ten respondents in a November 2020 survey stated that when using these services, they prefer installment payments, rather than paying the full amount later. Nevertheless, the BNPL services do have some clear downsides for the consumers, as alone in the USA, a significant share of BNPL users have already missed at least one payment, while approximately two-thirds of users had their credit card at more than 75% of the maximum limit at the moment of the first BNPL transaction

Amid the coronavirus pandemic, various authorities became concerned about the accelerated activity of BNPL service providers

Consumers worldwide became increasingly attracted by the BNPL services because of the economic disruptions of the COVID-19 health crisis. The increased use of BNPL raised concerns of several governmental representatives, as the regulatory frameworks are still quite unclear for the industry. This happened, for example, in Europe, as the European Commission stated plans to update the current consumer credit agreements, considering the BNPL service providers activity; in the UK, the Financial Conduct Authority intends to introduce initiatives concerning the industry this year; and in Australia, where at the behest of Australian Securities and Investment Commission, the Reserve Bank of the country proposed new regulations. The regulators are mainly concerned about overspending by local consumers, and the lack of transparency of the exact terms that BNPL providers apply, as detailed in the yStats.com publication.

Despite major BNPL service providers accelerating their market shares, local ones are still stepping in

During the COVID-19 pandemic, Klarna, one of the main BNPL service providers saw its customer base grow rapidly, as more than 20% of its users connected in 2020. Despite steadily growing revenues, the company initiated new services and further market expansion, which resulted in negative net profits. Another serious BNPL player, Afterpay, more than doubled its sales, total income, active customer base, and significantly increased the number of connected merchants during the health crisis. Similarly, Affirm, which mainly operates in North America, managed to raise the number of active users by about 50% in 2020, compared to 2019. Additionally, the company presented its ambitious plan to nearly double its revenue by the end of the 2021 financial year. Nevertheless, in many countries where these and other major players are present, a significant number of BNPL newcomers emerged right before and during the pandemic, which attracted substantial capital investment, according to the yStats report.

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1.Management Summary

2.Global Overview

  • BNPL Regulations Overview, March 2021
  • BNPL Trends and Benefits for Merchants, March 2021
  • Breakdown of Payment Methods When Booking a Service Related to Travel, incl. BNPL, in % of Adult Travelers, 2020

3.United States of America

  • BNPL User Penetration Rate, in %, and Share of BNPL Users Who Missed at Least One Payment, in %, December 2020
  • BNPL User Penetration Rate, in % of Respondents, and Change in Use of BNPL Compared to March 2020, in %, by Age Groups, September 2020
  • BNPL Service User Penetration Rates, by Age Groups, in % of Consumers, July 2020 & March 2021
  • Breakdown of BNPL Usage, by Credit Utilization Rate at First BNPL Transaction, in %, July 2020
  • Breakdown of BNPL Usage, by Credit Utilization Rate at First BNPL Transaction, in %, July 2020
  • Breakdown of Most Common BNPL Lenders Used, in % of BNPL Users, May 2020
  • Breakdown of Most Common BNPL Use Cases, by Product Category, in % of BNPL Users, May 2020
  • Breakdown of Reasons to Use BNPL, in % of Online Consumers, September 2020
  • Breakdown of Reasons to Use BNPL, in % of Consumers, July 2020
  • Breakdown of Online Consumers Who Would Be “Very” or “Extremely” Interested in BNPL, by Age Group, in % of Non-BNPL Users, March 2020 & September 2020
  • Share Consumers Who Would be “Very” or “Extremely” Interested in Using Digital Wallets that Offered Select Plans, by Age Groups, in %, September 2020

4.Europe

  • Overview of BNPL Startups, incl. Tymit, Montonio, Revo, Zilch, and Alma, March 2021
  • Share of Cross-Border BNPL, in % of Total Cross-Border BNPL Transaction Value, 2025f
  • Breakdown of Select Payment Methods Offered by Merchants, by “Growth” and “Non-Growth” Mindsets of Merchants, incl. BNPL, in %, September 2020
  • Share of Consumers Who Would Like BNPL Added to the Credit Card or Current Account, in % of BNPL Users, October 2020
  • Share of BNPL Users who Prefer to Pay via installments, and in One Later Lump-Sum Payment, in %, October 2020
  • Average Customer Debt, in GBP, by BNPL Service Providers, and by Age Groups, August 2020
  • Average BNPL Time to Pay Back, in months, by BNPL Service Providers, and by Age Groups, August
  • Breakdown of BNPL Usage Cases, in %, August 2020
  • Overview of Oney Bank’ BNPL Activity, March 2021
  • Breakdown of Top Requirements to a BNPL provider, in % of Respondents, 2020
  • Breakdown of the Channels of the Last BNPL Payment, and the Potential BNPL Channel, in % of Respondents, 2020
  • BNPL Adoption Rate, in % of Respondents Aware of BNPL, and Breakdown of Respondents Attitude Towards BNPL Usage in the Future, by Consumer Type, in % of BNPL Users, 2020

5.Asia

  • Overview of Top BNPL Service Providers, incl. Paidy, Pine Labs, Akulaku, Cashalo, Atome, and hoolah, March 2021
  • Yearly Transaction Values, in AUD billion, Active Users, in million, and Active Merchants, by Selected BNPL Providers, December 2020
  • Breakdown of the Most Frequently Used Online Payment Methods, incl. BNPL, in % of Online Shoppers, May 2020
  • Breakdown of the Most Frequently Used Online Payment Methods, incl. BNPL, by Annual Household Income, in % of Online Shoppers, May 2020
  • Share of Online Shopping Transactions via BNPL, by Age Group, in % of Online Shoppers, May 2020
  • BNPL User Penetration Rate, and Share of BNPL Users Who Made a BNPL Mistake, by Gender, in % Respondents, October 2020
  • Breakdown of the Most Common BNPL Mistakes, by Gender, in % of Respondents, October 2020
  • Share of Travelers Who Used Buy Now Pay Later Payment Method, in % of Adult Travelers, 2020

6.Middle East and Africa

  • Overview of BNPL Market and Service Providers, March 2021
  • Top 5 BNPL Startups, by Funding Amount, incl. Postpay, Tabby, and Tamara, December 2020

7.Major BNPL Service Provider: Klarna

  • Klarna’s Activity Overview, March 2021
  • Klarna’s Total Net Operating Income, and Net Profit, in SEK thousands, 2016 – 2020
  • Overall Number of Klarna’s Users, and Klarna’s Monthly Active App Users, in millions, 2019 & 2020
  • Top 10 CNBC Disruptor Companies, incl. Klarna, June 2020
  • Klarna’s Total Net Operating Income, and Net Profit, in SEK thousands, 2016 – 2020
  • Overall Number of Klarna’s Users, and Klarna’s Monthly Active App Users, in millions, 2019 & 2020
  • Terms of Use of Klarna’s Services, incl. Pay in 4, Pay in 30, Pay Now, and Financing, March 2021
  • Share of Klarna’s User Who Ever Missed a BNPL Payment, in %, October 2020

8.Major BNPL Service Provider: Afterpay

  • Afterpay’s Activity Overview, March 2021
  • Overview of Afterpay’s, PayPal’s and CommBank’s BNPL Service, incl. credit check, individual purchase price, max credit limit, Use Cases, Payment Plan, and Late Fees, March 2021
  • Afterpay’s Underlying Sales, Net Transaction Margin, Gross Losses, Total Income, Active Customers, Merchants, FY 2016 – FY 2020, and Year-on-Year Change, in %, FY 2020
  • Share of Transactions via Afterpay that are Paid Back on Time, in %, February 2021
  • Afterpay’s Share of Late Fees, in % of Afterpay’s Total Income, February 2021

9.Major BNPL Service Provider: Affirm

  • Affirm’s Activity Overview, March 2021
  • Overview of Affirms’s Key Financial Metrics, incl. GMV, Total Revenue, Transaction Costs, and Adjusted Operating Loss, Q4 2019, Q4 2020, H2 2019, H2 2020
  • Overview of Affirms’s Key Financial Metrics, incl. GMV, Total Revenue, Transaction Costs, Adjusted Operating Loss, and Weighted Average Shares Outstanding, Fiscal Q3 2021e, and Fiscal 2021f
  • Affirms’s Active Users, in millions, December 2019, June 2020, and December 2020

10.Select Payment Facilitators Offering BNPL Services

  • Various Facilitators’ BNPL Activity Overview, incl. Stripe, Mastercard, and Shopify, March 2021
  • Share of PayPal Credit’s User Who Ever Missed a BNPL Payment, in %, October 2020
Read More
  • Affirm
  • Afterpay
  • Akulaku
  • Amazon
  • Apple Pay
  • Atome
  • Carbon Zero
  • Cashalo
  • Clearbanc
  • Divido
  • Google Pay
  • MasterCard
  • Paidy
  • PayBright
  • PayPal
  • Pine Labs
  • QuadPay
  • Revo
  • Splitit
  • Twisto
  • Tymit
  • ViaBill
  • Visa
  • Zilch
  • hoolah
Read More

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