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Buy Now Pay Later to surpass $1 trillion by 2030, says GlobalData

 

October 28, 2022 (Investorideas.com Newswire) With big tech companies and leading payment providers set to take over the Buy Now Pay Later (BNPL), as spearheaded by Apple's Apple Pay Later, leading data and analytics company GlobalData expects the BNPL market to surpass $1 trillion by 2030.

Apple paves the way for other big tech and payment providers to adopt BNPL

GlobalData's latest report, 'Tech in 2030 - Thematic Research', predicts that the high demand for BNPL services by both merchants and customers will make this sector popular with both big tech and large payments providers-with companies such as Apple, Google, Mastercard, PayPal, and Visa expected to be leading players in the market by 2030.

Maddy Irwin, Thematic Analyst at GlobalData, comments: "Big Tech and large payment providers can seamlessly incorporate BNPL into their platforms whether they're profitable or not forcing fintechs with unsustainable revenue models out of the market. For Visa and Apple, BNPL does not need to be profitable and is merely an incentive to keep existing customers in their ecosystems."

Apple has competitive advantage over BNPL providers

Apple has taken the lead with Apple Pay Later launched in September, and GlobalData expects them to be one of the biggest players by 2030.

Irwin continues: "Apple is likely to have a competitive advantage over other BNPL providers, as it will be easy for existing Apple Pay and Apple Wallet users to adopt these services. Further, Apple has a huge existing user base."

COVID-19 and cost-of-living crisis spurs BNPL popularity

The growing demand for BNPL services followed an online shopping boom during the COVID-19 pandemic and is now being driven by the need for payment flexibility in light of the current economic situation.

Irwin continues "BNPL has longevity due to strong customer demand. It is being used by many to help deal with the rising cost of living and to alleviate anxiety around personal finance. Spreading the cost of payments is an attractive option for consumers amid a period of rising inflation, and BNPL is also convenient for merchants as the lending provider is taking on the risk of default."

BNPL will have greater transparency and rigorous credit checks by 2030

GlobalData's report also notes that part of the reason that the BNPL sector has been able to grow rapidly is due to a lack of regulation. However, governing bodies are now reviewing the sector and considering imposing rules to protect consumers from accumulating unmanageable debt. BNPL is already facing increasing regulatory scrutiny from the likes of the FCA. Providers may need to charge interest and undertake affordability checks on customers.

Irwin continues: "By 2030, regulatory bodies will have ironed out the murky BNPL sector, clamping down on the need for transparency and rigorous credit checks. Its poor reputation will improve as a stronger framework is set in place. Greater transparency is needed to ensure that customers understand that they are accruing debt through BNPL services, which can negatively affect their credit scores. This is especially relevant given the effect of the rising cost of living, where BNPL is expanding beyond retail and encompasses everyday expenses."

For more information

To gain access to our latest press releases: GlobalData Media Centre

Analysts available for comment. Please contact the GlobalData Press Office:

EMEA & Americas: +44 (0)207 832 4399
Asia-Pacific: +91 40 6616 6809
Email: pr@globaldata.com

Notes to Editors

Quotes provided by: Maddy Irwin, Analyst in the Thematic Intelligence team at GlobalData

About GlobalData

4,000 of the world's largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData's unique data, expert analysis and innovative solutions, all in one platform. GlobalData's mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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