Straits Research forecasts BNPL could reach $3.7 trillion by 2030 with more than 900 million users worldwide. Adobe Analytics notes grocery BNPL orders jumped 40%, and home furnishings rose 38% in the first two months of 2023.
And then there’s Apple Pay Later! We’ve got a roundup of insights into Apple’s version of BNPL and the implications for consumers, merchants, and competitors. Apple aims to take a bite out of the entire BNPL orchard, and if it works out in the US, the world is their, dare I say, Apple. Great reading ahead!
Buy now, pay later could become a multi-trillion-dollar business
The market for buy now, pay later could soar to $3.7 trillion by 2030, according to Straits Research, reaching an estimated 900 million users worldwide. Buy now, pay later volume could exceed $3.5 trillion by 2030, according to Straits Research forecast. PayPal Credit dominates the US market with 34.6 million users, four times the number of second-placed Klarna. Affirm and AfterPay, each with about 5.6 million US-based users, and FuturePay, with 3 million, round out the top five. Investopedia
Adobe Analytics shows Buy Now Pay Later usage is higher amid economic concerns
The current economic uncertainty and inflationary pressures in non-discretionary spending categories are prompting consumers to delay purchase payments by leveraging buy now pay later options (BNPL). Categories showing increased demand in BNPL purchases include groceries and home furnishings. In the first two months of 2023, online groceries’ share of BNPL orders grew a staggering 40%, while home furnishings grew by 38%. Forbes
Apple awkwardly pushes into buy-now-pay-later
Apple is late to the buy-now-pay-later party. When Tim Cook unveiled plans last June to offer US shoppers a version of the popular four-payment system for buying merchandise, the market was somewhat healthier. If anyone can help validate the product, it’s Apple, but times are considerably tougher. Pay-later providers have taken a beating. Affirm’s shares are down nearly 60% since June, and those of PayPal and Block, which bought industry pioneer AfterPay for $29 billion in Feb 2022, have slumped, too. Reuters
Experts say Apple’s move into buy now, pay later is likely to catch on with customers –and bring out the regulators
Apple was quick to point out that the new BNPL offering carries zero fees and interest, provided that someone pays back their loan on time. If they don’t, they’ll be disqualified from the scheme. And in all likelihood, many will indeed miss a payment: Data shows one in 10 U.S. consumers who take out BNPL loans—often through companies like Affirm and Klarna—are ultimately hit with late fees. Fast Company
Apple introduces buy now, pay later service with no fees or interest on purchases up to $1,000
The system is integrated into the company’s existing Apple Pay setup, meaning merchants won’t have to opt-in to provide Apple Pay Later to customers, according to the company. It is also incorporated into Apple Wallet, allowing users to track, manage, and apply for loans from their phones. Loans through the service are paid off through four payments over six weeks, and the company charges no interest and no fees for the loans, Apple said in a press release. Business Insider
Apple rolls out Apple Pay Later — a buy now, pay later service
Some iPhone users will soon be able to use their phones to pay for purchases in installments. It’s called Apple Pay Later, and it lets users apply to split purchases up to a thousand bucks in four payments with no interest or fees, but is it risk-free? Lauren Saunders is Associate Director at the National Consumer Law Center. Apple says its Pay Later service was designed with financial health in mind. Are there any downsides? NPR Radio, Morning Edition
Apple just launched its buy now, pay later service—here’s how it compares with Affirm, Afterpay, Klarna and PayPal
Apple is shaking up the buy now, pay later industry. On Tuesday, the tech giant launched Apple Pay Later, allowing Apple Pay users to split purchases into four interest-free payments over six weeks without an additional fee. Before making a purchase, Apple Pay Later users can apply for a loan between $50 and $1,000 and use it for in-app purchases or to buy products online through retailers that accept Apple Pay. CNBC
Apple Pay Later could upend BNPL space
Apple first announced its plan to create a buy now, pay later option for the Apple Wallet in July 2021, but it was not until this week that the service officially launched. Apple Pay Later permits US shoppers to split purchases — retail, e-commerce, in-app — into four interest-free payments. The service could encourage some shoppers to make purchases sooner, which, in turn, might boost both omnichannel retail and e-commerce. Merchants already accepting Apple Pay need no additional action — the BNPL option should work automatically. Merchants on Shopify, BigCommerce, and other platforms can turn on Apple Pay. PracticalEcommerce
PYMNTS Intelligence: Governments around the world explore BNPL regulation
The BNPL market has operated largely free of government oversight since its launch, following in the footsteps of many of its counterparts in the tech world. The laissez-faire environment could quickly be drawing to a close as governments across the globe consider regulations that would apply many of their existing credit laws to the BNPL market. This month, PYMNTS explores pending US and European Union regulations and how these regulations could affect BNPL providers. PYMNTS
Senators urge BNPL crackdown
Senators Jack Reed (D-RI), Tammy Duckworth (D-Ill.) and Sherrod Brown (D-Ohio) are calling on the Consumer Financial Protection Bureau to bring the largest buy now, pay later providers under more federal supervision. In a letter to CFPB Director Rohit Chopra dated Mar 22, the three urge the bureau to bring big BNPL lenders under its watch to “better protect consumers from unfair, deceptive and abusive acts and practices.” PaymentsDive
Recent BNPL report news:
BNPL Report – March 27: Adobe, top providers, credit reports, B2B, Sift, fraud, AI, Atome
Picking a new or additional BNPL provider to boost online or retail sales? The US Canada Business Intelligence Report profiles the business models, costs and USPs of 93 leading BNPL operators. More information and valuable insight here.