BNPL is increasingly a source of finance for small business as Santander launches pay-later terms for global companies. Microsoft Start looks at how BNPL is disrupting credit cards and the companies investing in it. According to new research, shoppers expect seamless BNPL checkout online and in-store, while a different study shows BNPL is crossing all credit scores and higher incomes.
Australia’s Securities Chair fears high-risk credit and says regulation is needed. In Taiwan, BNPL regulation is coming soon to protect consumers. The BNPL bubble is certainly inflating and at risk, according to The Atlantic. Finally, consumers beware, companies take note of four less-known risks with most BNPL lenders. But, bubble or not, BNPL is growing in popularity.
BNPL – an alternative for traditional business finance?
BNPL providers are increasingly courting businesses with their installment-as-a-service solutions. B2B commerce will be a $4 trillion market by 2028, and BNPL is making moves to take a big bite of that pie. BNPL is a big factor in the decline of traditional credit card transactions, trending down around 8% year-on-year. During Covid-19, £2.7 billion in BNPL transactions were made in the UK (FCA figures) and are expected to grow by 50.5% YoY to reach $29.9 billion in 2022. Finextra
Buy Now Pay Later is disrupting the credit card industry. Learn about companies developing or investing in the BNPL phenomenon.
Microsoft Start takes an interesting look at companies investing in or utilizing BNPL. This list has performed -26.35% over the past year. By comparison, S&P BSE Sensex Index is 3.18% over the same period. The beta of this list has “High” volatility at 1.60. List Beta is calculated using an equally weighted average beta of the securities within this list, including 60% of Technology stocks, 20% of Financials stocks, 10% of Consumer Cyclical stocks, and 10% of Industrials stocks. Microsoft Start
Santander launches buy-now-pay-later offering that could be a ‘game changer’ for cash-strapped corporates
Santander has launched a business-to-business (B2B) buy-now-pay-later service which claims to be the first of its kind. The Spanish lender’s corporate division has struck a deal with credit firm Allianz Trade and business-to-business payments platform, Two, to launch the first global B2B buy-now-pay-later platform for multinational corporates. The new product will provide a platform for big firms to defer payments at checkout while allowing suppliers to pocket their cash. CITY A.M.
Shoppers expect seamless BNPL checkout both online and in-store
Consumers leaned into buy now pay later options this holiday season as inflation strains their budgets, but despite its roots as an online payment method, BNPL has expanded to use in stores. With one-quarter of all shoppers blending in-store and online shopping this year, rewards await retailers that offer both online and offline BNPL — seamlessly. A recent study found the Asia-Pacific BNPL industry is set to hit $92 billion in transactions by 2025, up from $23 billion in 2020. PYMNTS
2023 looms as BNPL’s banner year as consumers seek payments choice
“At the beginning of the BNPL boom, we heard all about how Gen X and Gen Z were the ones who wanted buy now, pay later,” Ed O’Donnell, CEO of Versatile Credit, told Karen Webster. “That’s not proving to be exactly true — there’s a broader group of customers who are looking to use that product.” O’Donnell said that the demand for BNPL has been evident among households earning more than $100,000. “This has really exploded across all FICO bands and wallet sizes.” PYMNTS
ASIC fears high-risk credit push
Cost of living pressures and rising interest rates will push people towards riskier credit products such as payday loans or buy now, pay later services, the head of the Australian Securities and Investments Commission has warned. Mr Longo said, “We’re on the lookout for predatory lending practices.” A paper released in Nov seeks views on three broad options to provide a regulatory foundation for the future growth of BNPL in Australia and the sector’s seven million accounts. Financial Review
BNPL regulation in Taiwan is imminent
In the final week of Dec, the Financial Supervisory Commission (FSC) said it would unveil regulatory guidelines for BNPL services before the Lunar New Year holiday, focusing on risk management, protection of consumer rights and education. BNPL companies active in Taiwan include Shopee, Chailease Consumer Finance Co’s Zingala, 21st Century Digital Technology Co’s Pay-Later, Net Protections Holdings Inc’s Aftee, and until very recently, Advance Intelligence Group’s Atome. Kapronasia
The ‘buy now, pay later’ bubble is about to burst
Many Gen Zers have rejected traditional credit in favor of new-age layaway programs, which are riskier than they may seem. Putting a banh mi on layaway—this is the world that “buy now, pay later” programs have wrought. In a few short years, financial technology firms such as Affirm, Afterpay, and Klarna have infiltrated nearly every corner of e-commerce. US BNPL loans grew more than 1,000% from $2 billion to $24.2 billion. The Atlantic
4 Little-known risks of ‘buy now, pay later’
Some potentially costly drawbacks to BNPL include deferred interest charges if loans are not paid off during an introductory period. Some BNPL companies may report late payments after 30 days. Watch out for the appeal of lower payments when the total cost may be more than affordable. Most BNPL plans don’t include the same consumer protection credit cards offer. As with any credit, read the fine print. Motley Fool
Recent BNPL Report news:
BNPL Report – Jan 7: Humm bails UK, Sugar, Smartpay, Actyv.ai, healthcare, retail BNPL