The number of buy now, pay later (BNPL) users will surpass 900 million by 2027, rising from 360 million in 2022.
This finding comes from Juniper Research’s new report ‘Buy Now Pay Later: Regulatory Frameworks, Competitor Leaderboard & Market Forecasts 2022-2027.’
It stated that 157% growth will be driven by the anticipated economic downturn, which will increase the demand for low-cost credit solutions.
The research also identified India as having potential for rapid growth in BNPL. It predicts users to grow from 25 million in 2022 to 116 million by 2027. This is due to rising e-commerce usage and growing interest in international goods available through online retailers.
As a result, it recommends vendors build strategic partnerships with vendors in developing markets with established consumer bases to successfully capitalise on user growth.
Furthermore, the report suggests the adoption of virtual cards will increase BNPL’s usage. Juniper claims virtual cards allow BNPL schemes to compete with credit cards, particularly in-store, where single-use BNPL cards can be used within a digital wallet to complete contactless payments.
Due to this, Juniper suggests BNPL vendors should differentiate their services through virtual cards, browser extensions that automatically facilitate BNPL payment services and loyalty schemes.
Despite the predicted adoption surge, governments have recently explored new regulations for these services. The UK government recently announced three plans to boost regulation around BNPL credit agreements.
Lenders will now be required to carry out affordability checks, ensuring that loans are affordable for consumers and will amend financial promotion rules to ensure BNPL advertisements are fair, clear and not misleading.
Copyright © 2022 FinTech Global