Since the start of the pandemic, the buy now, pay later (BNPL) market has experienced exponential growth.
According to the research data analyzed and published by Definanzas.com, the top BNPL apps in the market have seen the number of their monthly active users (MAUs) surge by 186% year-over-year (YoY) in 2021. In the same period, app installs rose by 46% YoY.
Global BNPL transaction volume is projected to surpass $680 billion by 2025 from $285 billion in 2018. Similarly, Bank of America estimates that the market for BNPL apps will grow ten to fifteen-fold by 2025. That would place worldwide BNPL transaction value in the range between $650 billion and $1 trillion.
Adoption of the novel payment method is still relatively low. According to Worldpay Retail Global Payments, the percentage of transactions using BNPL options in North America was 0.9% in 2020. It is expected to increase to 3% by 2023.
Additionally, based on a Capgemini survey cited by eMarketer, credit cards are still the most popular payment method globally. 62.4% of the survey’s respondents preferred credit cards, compared to 30.1% for BNPL.
A host of companies are now offering BNPL services. In fact, even payment service incumbents like PayPal have joined the bandwagon. PayPal’s BNPL option has attracted 330,000 merchants and 3.3 million unique customers since its launch in August 2020.
New shopping habits such as BNPL are expected to push global eCommerce figures to new highs in 2021. According to Adobe’s Digital Economy Index, digital commerce could surge by an astounding 20% this year to reach $4.2 trillion. The US is expected to contribute between $850 billion and $930 billion to the annual figure. By 2022, it is projected to rise to $1 trillion. Among the key drivers of the performance is the adoption of BNPL. BNPL purchases shot up by 166% in March, following a 215% uptick in January and February.