Galileo and Mastercard extend BNPL to small businesses through Mastercard Installments. Signs are pointing to Klarna launching its own retail media network, and it has the scale to do it. 20% of US consumers could use BNPL to stretch their holiday shopping budgets this year, according to a Square-Afterpay report. AMEX UK CEO says BNPL may not be far off for British consumers. While BNPL in the UK could reach £37 billion ($45 billion) by 2026, service providers may need to reevaluate their business models during challenging economic times.
New Federal Reserve Bank of New York research shows that BNPL increases financial inclusion but brings other risks for some struggling consumers. An Australian mother’s post about her embarrassment for using BNPL to put food on her table went viral but prompted many other mothers to support her and share similar stories. India’s BNPL operators are wrestling with fraudsters and scams without the guarantees provided by credit cards.
Galileo, Mastercard team on smart BNPL for small businesses
David Feuer, chief product officer of Galileo Financial Technologies, told PYMNTS that the current financial services landscape is challenging for smaller firms — especially for the smallest of the small, the sole proprietorships that help power the US economy. To address the pain points, SoFi-owned Galileo has partnered with Mastercard to enable banks and FinTechs to extend Galileo’s buy now pay later via Mastercard Installments to small businesses. PYMNTS
Buy now, pay later … and then launch a retail media network?
Klarna is best known as a buy-now, pay-later service for e-commerce purchases. But don’t be surprised if the Swedish payments company eventually launches its own retail media network, joining a very crowded landscape. Klarna powers millions of e-commerce transactions daily for more than 150 million users. It has its own shopping app, partnerships with thousands of merchants and a desktop browser extension that supports flexible payments, even for online retailers that don’t have a direct partnership with Klarna. AdExchanger
One-fifth of consumers consider BNPL to stretch holiday budgets
Millennials are the most willing age group to consider BNPL to manage holiday spending amid rising prices, according to a Square and Afterpay report. Among consumers who use buy now, pay later services, 40% do so mainly to budget and manage their spending, according to the survey. Three-quarters of shoppers said inflation has made saving difficult, and 21% said they’d consider using a BNPL option to stretch their holiday shopping budget. PaymentsDive
BNPL firms must reevaluate their models in line with today’s landscape
The market is growing rapidly, as reports forecast BNPL spending in the UK to reach £37 billion ($45 million) by 2026. With that growth comes a responsibility to ensure that customers across the whole BNPL chain, both B2B and B2C, are managed in a way that best serves their interests. To navigate these challenging times, they must reevaluate their models based on more up-to-date parameters. Finextra
On the cards: Amex UK boss on plans for BNPL and keeping BA tie-up despite climate crisis
The Amex UK boss says she does not expect BNPL to displace the credit card market, but her company is clearly not above jumping on the bandwagon. In 2017, roughly two years after BNPL giant Klarna entered the American market, Amex’s US business introduced its own “Plan It” product, allowing customers to make monthly payments on a large purchase for a fixed fee, with interest while still earning rewards. It would be no surprise if Amex decided to offer BNPL to UK customers. The Guardian
BNPL improves financial inclusion but adds risks to consumers it helps
Research from the Federal Reserve Bank of New York shows that 19% of US consumers use BNPL, which jumps to 43% for those with credit scores below 620. 42% of those denied other forms of credit used BNPL, and 37% who had delinquent loans also used BNPL. Buy now pay later users are also more likely to borrow from friends, family, banks, or credit cards to come up with that money rather than pull from savings. Insider Intelligence
‘I have to use Afterpay to buy food for my family and I’m so embarrassed
A mum’s post has gone viral after she revealed her struggle to pay for necessities amid the cost-of-living crisis… she was shocked to find that many people were in the same boat. Rather than using Afterpay directly for food shopping, many mums said they used it to pay for gift cards at Woolworths and Coles and used those towards their shopping. “You can buy a gift card with Afterpay, and then they will send the barcode to your email, and you use it in-store,” one woman wrote. Kidspot/News.com.au
BNPL users asked to pay for transactions they never made
Lack of consumer protection makes buy now, pay later products, such as Olamoney Postpaid and Mobikwik ZIP, a cybercriminal’s playground, and service providers seem unfazed. Unlike credit cards, BNPL services lack transaction guarantees, leaving many customers vulnerable to phishing scams. The BNPL market is expected to reach $35–40 billion by 2026 from $3.5–4 billion in 2021 The KEN