22 Global Leaders in Buy Now, Pay Later

As e-commerce extends its reach, a wide variety of alternative payment methods are providing new ways for consumers to increase their buying power and manage online purchases.

 

Among the fastest-growing of these online payment methods is Buy Now, Pay Later (BNPL)  – which allows consumers to cover a small percentage of the total purchase price upfront and then pay off the rest in installments over a period of time. 

 

The global BNPL market is expected to grow by 10 to 15 times its current volume, reaching an impressive $1 trillion in annual gross merchandise volume by 2025. Although the most established BNPL regions are currently Europe and North America, BNPL is also on the rise in emerging markets, where it often serves as a more accessible credit alternative for consumers who lack access to traditional credit cards.

 

In addition to helping more people around the world to participate in the digital economy, e-commerce merchants benefit from a larger customer base and higher average order values. 

 

What are some of the other advantages of BNPL? Read on to see how Buy Now Pay Later benefits merchants as well as consumers, and which BNPL payment methods are the most popular across different regions of the world.

 

 

Table of Contents

Advantages of Buy Now, Pay Later for merchants

22 BNPL leaders around the world

BNPL solutions in Europe

BNPL solutions in Asia

BNPL solutions in the Middle East & Africa

BNPL solutions in North America

BNPL solutions in South America

BNPL solutions in Australia

Wrap Up: Making the most of BNPL

Buy Now, Pay Later provides a more consumer-friendly way of accessing credit when paying for goods online. Credit decisions are typically made within seconds, with more attainable financing options for a broader range of customers. In many emerging markets, BNPL helps to increase digital and financial inclusion, serving as an alternative credit source for individuals who aren’t covered by traditional financial products or services. 

 

By increasing buying power, BNPL also boosts the accessibility of e-commerce. Consumers spend 55% more when they can split the payment into installments. 

 

Merchants offering BNPL and other credit products, meanwhile, benefit from increased sales thanks to improved conversions and higher transaction values for certain types of payments. On PayU’s payment platform, transaction values in markets with installment payments are up to 10 times higher than for other payment methods. 

 

It’s simple. Customers feel more comfortable making larger purchases online because they can use a secure repayment option. Meanwhile, sellers are paid out for the entire payment amount at the time of purchase, eliminating any credit risk from the merchant perspective.

 

That’s why more and more merchants are bringing BNPL onboard as a payment method –  building a competitive advantage by making a wider range of products more affordable to the widest possible range of consumers.

BNPL solutions in Europe

BNPL is becoming increasingly popular across the entire continent, driven by the media coverage of high profile IPOs, massive homegrown players like Klarna, and double-digit e-commerce expansion in the fast-growing consumer markets of Eastern Europe.

 

The European BNPL market will grow to nearly $350 billion by 2025 – amounting to approximately 30% of projected e-commerce spending.

 

Here are some of the top European BNPL providers:

 

• Klarna. Swedish fintech Klarna is the largest BNPL player in Europe. Recently valued at $31 billion, Klarna is offered as a payment method by 250.000 merchants and is used by an estimated 90 million consumers across nearly 40 global markets. 

 

• PayPal. The longtime e-wallet leader stepped into the BNPL scene in late September 2020, but it’s already catching up quickly with the market thanks to integrations with major platforms like eBay. PayPal was the most downloaded app in Europein 2020 and is sure to remain a fixture in the BNPL space going forward.  

 

• Divido. This smart retail finance platform lets consumers spread the cost of their purchases while merchants receive money as the order is shipped. Divido allows its customers to white-label its technology so merchants can add their unique branding to this extra feature in their checkout experience.

 

• PayU Credit. The largest online credit broker and distribution platform on the Polish e-commerce scene, PayU Credit facilitates $1 billion in credit volumes across Poland, the Czech Republic, and Romania. Over 2,500 partner merchants use PayU Credit and can reap the benefits of extending a wider range of credit options to online consumers.

 

• TwistoPay. TwistoPay is a popular BNPL provider across the CEE region – specifically in Poland and the Czech Republic, with further expansion planned soon to Romania. Twisto allows customers to pay in anywhere between 3 and 12 installments (with low interest) or within 14 days without any commission or additional costs.

 

• PayU Installments. PayU’s installment service is part of the PayU Credit offering and is available free of charge to merchants in Poland, the Czech Republic, and Romania. In partnership with the Romanian marketplace eMAG, PayU recently launched a new installment offering called SLICE IT where consumers can pay in four installments spread across three months.

 

 

BNPL solutions in Asia

With lower penetration rates until now due to lack of customer awareness and limited availability of providers, Asia-Pacific is set for record BNPL growth in the coming years, with a projected CAGR of 145% by 2023.

 

Here are some the key Asian market leaders in BNPL:

 

• LazyPay. LazyPay is one of the most popular BNPL providers in India, one of the most promising e-commerce markets offering a combination of extensive existing users alongside massive potential for future growth. In a new frontier for BNPL, LazyPay recently unveiled the LazyCard – a type of prepaid card that works similarly to credit cards. It opens up BNPL for point-of-sale transactions while also enabling consumers to pay without worrying about their existing account balance. At the same time, LazyCard users can access credit card-style benefits such as travel rewards, points, cashback, and other advantages previously available only to traditional cardholders.

 

• Cashalo. This consumer finance platform from the Hong Kong-based fintech Oriente is a top choice for consumers in the Philippines. It offers PayLater, a flexible credit line people can draw on in any amount for purchases either from Cashalo’s e-store or the company’s partnered offline merchants.

 

• Paidy. This Japanese fintech startup provides POS financing to millions of Japanese consumers, asking only for their name, email address, and mobile phone. Paidy uses machine learning to score creditworthiness, underwrite transactions, and guarantee timely payment to merchants. The platform generates a consolidated bill at the end of the month, listing all the invoices for purchases completed through Paidy. Customers can pay them in full or via an installment plan.

BNPL solutions in the Middle East and Africa

With EMEA as a whole accounting for the world’s largest share of BNPL transactions via e-commerce, the Middle East and Africa will be key BNPL markets to watch over the coming years.

 

Here are some of the key solutions which are increasing the share of digital BNPL transactions across these two dynamic regions:

 

• Payflex. Payflex is a homegrown South African BNPL market leader founded in 2017. At checkout, users can select Payflex as a payment method and receive a credit decision in under a minute. Users can then split their payment into 4 installments over a total of 6 weeks, with the first installment due at checkout.

 

• RCS. This accredited consumer finance company offers users access to a shopping network where they can purchase products via installment payments. RCS also provides its customers with a card they can use to shop at over 26,000 stores across South Africa.

 

• Tabby. Using Tabby, retailers can offer their customers two comfortable ways of paying for purchases. Consumers have the option to split purchases into 4 equal payments and pay one bill per month without any interest. Alternatively, they can pay within 14 days.

 

• Tamara. Another popular BNPL solution, Tamara allows consumers to split payments into three. One-third of the amount is paid upfront and the rest settled over 60 days. The services don’t incur any fees or interest.

 

 

BNPL solutions in North America

While Europe may have established itself first as the leading BNPL stronghold, the United States, Canada and Mexico aren’t far behind. In 2021, the number of BNPL users in the US had increased by 81% year over year. In addition to homegrown giants like PayPal and new BNPL entrants like Affirm, the US is also a top growth market for international names like Klarna (Sweden) and AfterPay (Australia).

 

In addition to Klarna, which has established a foothold in the US, here are a few of the top BNPL players in North America:

 

• Affirm. With 12,000 merchants under its belt (including Amazon, Peloton, and Target), San Francisco-based Affirm is a top choice for US consumers looking for installment payments. Online buyers can use the web or a mobile app to use Affirm’s single-use virtual card across any retailer (both online and in-store).

 

• Afterpay. Used by some 100,000 merchants around the world, Afterpay offers one loan option: customers can pay for their purchases via 4 installments made over the period of 6 weeks. They can also take advantage of the Afterpay Card for in-store payments at select retailers such as CVS, Target, Nordstrom, and Macy’s.

 

• PayPal’s ‘Pay in 4’. With PayPal’s Pay in 4 service, customers can spread their payments into 4 installments that are due every two weeks. In total, the entire amount is paid off within 6 weeks, with the first payment due at the time of purchase.

 

• Sezzle. Founded in 2016, Sezzle is another popular BNPL product in North America. In addition to its partnership with US mega-retailer Target, Sezzle is among multiple American providers bringing BNPL into healthcare, working with a leading American urgent care provider to give patients the opportunity to pay off medical expenses in interest-free installments.

 

 

BNPL solutions in South America

Credit card penetration is low in most LatAm markets – creating a ripe environment for the growth of BNPL as an alternative. With a long history of installment payments for retail purchases that even pre-dates the internet, today more than 45% of e-commerce payments in LatAm are made via installments.

 

The majority of BNPL startups focus on Gen Z consumers, but South America is also full of interesting BNPL payment methods for other segments. Here are a few of the top names:

 

• Addi. This Bogota-based startup raised $140 million and doubled its valuation in the latest funding round, attracting the most renowned VC companies from Silicon Valley and beyond. Addi currently operates in Brazil and Colombia, planning an expansion to Mexico in 2022. Consumers can use the Addi platform and app to make purchases with just a few clicks and pay for them over three months at no cost. For larger purchases, Addi allows settling the bill up to 24 months.

 

• RecargaPay. Headquartered in São Paulo, RecargaPay counts 10 million wallets, creating an ecosystem of payments for millions of its customers. RecargaPay has also integrated consumer loans into the BNPL ecosystem, offering consumers the option to pay for energy and water usage in up to 12 monthly installments.

 

• Swap. Swap has recently launched a white label solution for BNPL platforms in Brazil. Swap uses the Mastercard network and single-use virtual cards to increase acceptance by retailers. The provider makes sure that consumers use credit for specific purposes using its multiple balance and shared authorization solution.

 

 

BNPL solutions in Australia

Australia has been one of the fastest adopters of BNPL solutions. Today customers pay for around 8% of all e-commerce transactions in installments. This volume is expected to grow to about 17% by 2023.

 

These leading BNPL solutions take a large chunk of the Australian market, and have also moved into other parts of the world – particularly North America:

 

• Afterpay. The top player on the Australian BNPL scene, Afterpay recently shared that its quarterly sales grew by 123% in comparison with the previous year. This international payments platform has gained traction across the United States and Australia, allowing its 10 million consumers to receive products immediately, pay via 4 interest-free installments, and get rewarded for paying on time. 

 

• Zip. Another BNPL giant, Zip is now available in Australia, New Zealand, South Africa, the US and the UK. Zip offers an app that lets users create a virtual card and use Apple or Google Pay to pay in-store. Customers can create a single-use virtual card for online shopping and pay in weekly, fortnightly, or monthly installments with zero interest. Zip comes with a monthly account fee of $6, but this is only charged if the user has an outstanding balance at the end of the month. 

With Buy Now Pay Later becoming increasingly popular as an alternative payment method around the world, a wide range of established players and new BNPL startups have emerged to fulfill the demand.

 

For merchants interested in offering BNPL across multiple global markets, choosing the right BNPL provider – or working individually with multiple BNPL services – can be a challenging proposition. The alternative is to choose a payment provider with the capability to enable both global as well as specific-to-market BNPL payment method options in different geographies.

 

Offering a combination of homegrown BNPL offerings as well as connections to local banks and alternative payment methods around the world, PayU provides merchants with the capability to offer a wide range of BNPL options and other payment methods at checkout.

 

As BNPL continues to increase its market share within the payment landscape, merchants should take note – and look for a global payment solution that can keep up with the trends.