BNPL is the natural product of multiple important trends, such as digitalization. The following tendency is enough to say that BNPL has a huge potential ahead of it, even in spite of increasing regulatory attention, bank competition and other policies.
BNPL services will gradually turn into online service providers and retailers, offering users or client companies to choose stores that cooperate with the platform and buy goods directly in the app. BNPL companies will enter new markets. For example, Scalapay began cooperating with jewelry and luxury stores in Italy.
Competition in the market is heating up: every player wants to eventually gain control of payments around the world. Companies that originally built their business around the BNPL services are now facing increasing competition from payment systems and well-known card issuers who do not want credit cards to become obsolete, yet they are willing to prepare and be ready if they do.
There are many options for implementing BNPL, and the details are important for both consumers and merchants, as well as for the companies offering the services on the B2B scale. Becoming a leader in the sector requires reaching a large number of merchants, achieving consumer adoption, implementing powerful AI underwriting, and having expertise in online marketing. Each of these aspects requires resources for successful implementation, therefore the main concept of the industry is: invest now, win later.
Companies on the BNPL market are actively collaborating between each other. A few years ago Affirm acquired Returnly, a service that provides returns for merchants and supplies them with analytics. Potentially, this information will help to increase sales.
In B2C, Klarna, another big player in the industry, is actively pursuing deals with high-profile retailers such as H&M, Walmart and Sephora. The company has also acquired several projects, including Toplooks, which helps retailers create customized marketing images and messages, and HERO, which helps retailers communicate with customers through text messages, videos and online chats.
Speaking of the B2B sector, examples of services that are actively working on market include Splitit, a BNPL solution for B2B that allows businesses to pay for purchases in installments, without incurring any interest or fees, and Payright, an Australian BNPL service that specializes in B2B financing solutions, offering businesses the ability to purchase goods and services and repay the amount in installments.
BNPL approach helps to optimize the services that are available on the market into a single transaction with full transparency that promises to connect buyers, sellers and companies with instant credit, improving the commerce and sales markets.
On a B2C scale, BNPL services provide clients the opportunity not to change their shopping habits, managing their budget wiser. This approach helps to conduct deals that are more strategic for both sides of the agreement.
On a B2B scale, businesses are able to scale their services and attract new customers by providing better terms and conditions. Many companies center their business model around BNPL to survive in the competitive market, increase sales and revenue.
Although various companies have entered the market in different ways, at the end of the day BNPL is not just about one-time transactions, but about managing customer relationships. It's a new form of credit. Behind it lies an ambition to dominate the future of shopping with an efficient range of data and transactions, shifting the standards of the financial industry.
By connecting payment by installments, companies, such as the ones from the retail industry, are gaining a new active audience, especially from the younger generation which includes millennials and zoomers.
Online shopping, among other digital services, is becoming more and more popular, and the global BNPL market is growing. It is predicted that by 2030, these services will become the traditional way to pay for services, becoming more usual on both B2C and B2B markets.