Welcome to the BNPL Report! The US is now Klarna’s biggest BNPL market, with 32 million customers, up 42%. PayPal said BNPL users purchased from more than two million merchants last year. B2B BNPL is booming thanks to Playter and other SMB’ clever credit’ providers. Techcrunch notes bumps on the BNPL path, however. Banks are recognizing BNPL presents brand-new loan opportunities with the right technology or partners.
With more than 2 million users, Dubai’s Tabby raises $58 million, reflecting BNPL’s rapid growth in the Middle East. At more than $1.5 billion in sales, MENA pay later growth is coming from youth and women. While Worldpay says BNPL will reach 5.3% of e-commerce sales worldwide, layoffs and loan losses may cause bumps in the road, according to Techcrunch. It’s hard to see a detour with installment payments so well-established.
Klarna says US is now its top market amid BNPL boom
Klarna is riding a wave of buy now pay later popularity in the US. The Swedish payments company said that America is now its largest market in terms of revenue, with volumes up 92% year over year. The company has 32 million customers in the US, which accounts for more than a fifth of its worldwide user base and represents a 44% increase year over year. It has more than 22,000 US merchants, up 47% from last year. PYMNTS
PayPal’s evolving strategy in a crowded BNPL market
PayPal entered the BNPL sector by launching its first BNPL offering – ‘Pay in 4’, and expanded its suite of products by rolling out another BNPL product, ‘Pay Monthly,’ in 2022. The decision to branch out its BNPL offering came as studies showed rising consumer interest in manageable, flexible payments for larger purchases. 65% of Americans were saving up for a bigger purchase, and 79% considered creating and maintaining a budget. PayPal users have purchased at more than 2 million merchants with BNPL. Tearsheet
‘Massive’ B2B marketplace growth spurs new BNPL for business pairing
Hokodo and Lemonway have partnered to help B2B marketplaces in Europe offer trade credit online. The collaboration on B2B buy now, pay later (BNPL) will bring together Hokodo’s ability to evaluate a business’ buying power in real-time and Lemonway’s services for reconciling payments and helping platforms with payment regulations compliance, the companies said. A new wave of BNPL providers is using data to extend B2B-focused loans, which is cheaper than traditional funding. PYMNTS
Playter expands BNPL offerings enabling businesses to use ‘clever credit’
Playter now enables businesses to offer and use buy now, pay later. The company launched its new Paid product that enables its small and medium-sized business (SMB) clients to provide their customers with extended payment terms. This joins the BNPL provider’s Pay product, allowing SMBs to receive similar terms from their suppliers. During the Black Friday weekend, 10% of online shoppers and 8% of in-store shoppers used BNPL to make purchases, according to the PYMNTS report. “PYMNTS
Protect me from what I want
In its 2022 Consumer Lookback report, VC firm Battery Ventures found that convenience, size of purchase and the ability to manage finances were the primary drivers for Americans to use BNPL. Quoting data from polling firm Morning Consult, Battery also noted US adults “from households with annual income between $50,000 and $99,999, as well as those with annual income of $100,000 or more, [were] even more likely to have used BNPL (21% and 20% in June, respectively). ” Battery’s report warns that delinquency rates may rise in the short term. Techcrunch
The rise and fall of buy Now, Pay Later and residual opportunities for banks
While most of the early BNPL players were fintechs and other digital players, we see a great opportunity for banks to expand into this form of payment through consumer and corporate credit cards and short-term unsecured lending. Many banks are exploring these opportunities, despite having previously distanced themselves from BNPL in its original form. BNPL is an important and growing element of the payments industry. The Paypers
Dubai-based Tabby raises $58 million in funding round, valued at $660 million
Dubai-based Tabby raised $58 million from investors, including Sequoia Capital India, PayPal Ventures, STV, Arbor Ventures and Endeavor Catalyst, in a funding round that valued it at almost $700 million. It operates in Saudi Arabia, the UAE, Egypt and Kuwait and competes with firms including Tamara. The potential for the region’s buy now, pay later sector is for about 150 million customers, leaving room for Tabby to grow its 3 million active users. Alarabiya News
MENA region sees a rise in BNPL service, driven by youth and women
The buy-now-pay-later (BNPL) service is growing in popularity in the Middle East North Africa (MENA) region, and the primary demand is coming from youth people and women. According to a report by Redseer, the BNPL market is pegged at $1.5 billion in MENA. Among the BNPL users in the region, more women (13%) featured in the mix than men (8%) in 2022. Also, more people of Gen Z (15%) used BNPL compared to Gen X (6%) and Gen Y (12%). Your Story Gulf Region
Trouble brewing for buy now pay later providers
BNPL companies expanded their markets between 2019 and 2021 and hired more employees. As losses mount despite more users and higher revenues, there are layoffs and cost-cutting. Public companies have seen stock prices plummet, and private company valuations slashed. Despite the troubles, BNPL will account for about $438 billion – 5.3% – of global e-commerce transaction value by 2025, up from 2.9%, or $157 billion, in 2021, according to Worldpay. Practical Ecommerce