Buy Now Pay Later Market Size, Share & Trends Analysis Report By Channel (Online, POS), By End-use (Retail, Automotive), By Enterprise Size, By Region, And Segment Forecasts, 2023 - 2030

Research Methodology

A three-pronged approach was followed for deducing the buy now pay later market estimates and forecasts. The process has three steps: information procurement, analysis, and validation. The whole process is cyclical, and steps repeat until the estimates are validated. The three steps are explained in detail below:

Information procurement: Information procurement is one of the most extensive and important stages in our research process, and quality data is critical for accurate analysis. We followed a multi-channel data collection process for buy now pay later market to gather the most reliable and current information possible.

• We buy access to paid databases such as Hoover’s and Factiva for company financials, industry information, white papers, industry journals, SME journals, and more.
• We tap into Grand View’s proprietary database of data points and insights from active and archived monitoring and reporting.
• We conduct primary research with industry experts through questionnaires and one-on-one phone interviews.
• We pull from reliable secondary sources such as white papers and government statistics, published by organizations like WHO, NGOs, World Bank, etc., Key Opinion Leaders (KoL) publications, company filings, investor documents, and more.
• We purchase and review investor analyst reports, broker reports, academic commentary, government quotes, and wealth management publications for insightful third-party perspectives.

Analysis: We mine the data collected to establish baselines for forecasting, identify trends and opportunities, gain insight into consumer demographics and drivers, and so much more. We utilized different methods of buy now pay later market data depending on the type of information we’re trying to uncover in our research.

• Market Research Efforts: Bottom-up Approach for estimating and forecasting demand size and opportunity, top-down Approach for new product forecasting and penetration, and combined approach of both Bottom-up and Top-down for full coverage analysis.

• Value-Chain-Based Sizing & Forecasting: Supply-side estimates for understanding potential revenue through competitive benchmarking, forecasting, and penetration modeling.

• Demand-side estimates for identifying parent and ancillary markets, segment modeling, and heuristic forecasting.

• Qualitative Functional Deployment (QFD) Modelling for market share assessment.

Market formulation and validation: We mine the data collected to establish baselines for forecasting, identify trends and opportunities, gain insight into consumer demographics and drivers, and so much more. We utilize different methods of data analysis depending on the type of information we’re trying to uncover in our research.

• Market Formulation: This step involves the finalization of market numbers. This step on an internal level is designed to manage outputs from the Data Analysis step.

• Data Normalization: The final market estimates and forecasts are then aligned and sent to industry experts, in-panel quality control managers for validation.

• This step also entails the finalization of the report scope and data representation pattern.

• Validation: The process entails multiple levels of validation. All these steps run in parallel, and the study is forwarded for publishing only if all three levels render validated results.

Buy Now Pay Later Market Categorization:

The buy now pay later market was categorized into four segments, namely channel (Online, POS), enterprise size (Large Enterprises, Small & Medium Enterprises), end-use (Retail, Healthcare, Leisure & Entertainment, Automotive), and region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa).

Segment Market Methodology:

The buy now pay later market was segmented into channel, enterprise size, end-use, and regions. The demand at a segment level was deduced using a funnel method. Concepts like the TAM, SAM, SOM, etc., were put into practice to understand the demand. We at GVR deploy three methods to deduce market estimates and determine forecasts. These methods are explained below:

Market research approaches: Bottom-up

• Demand estimation of each product across countries/regions summed up to from the total market.

• Variable analysis for demand forecast.

• Demand estimation via analyzing paid database, and company financials either via annual reports or paid database.

• Primary interviews for data revalidation and insight collection.

Market research approaches: Top-down

• Used extensively for new product forecasting or analyzing penetration levels.

• Tool used invoice product flow and penetration models Use of regression multi-variant analysis for forecasting Involves extensive use of paid and public databases.

• Primary interviews and vendor-based primary research for variable impact analysis.

Market research approaches: Combined

• This is the most common method. We apply concepts from both the top-down and bottom-up approaches to arrive at a viable conclusion.

Regional Market Methodology:

The buy now pay later market was analyzed at a regional level. The globe was divided into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa, keeping in focus variables like consumption patterns, export-import regulations, consumer expectations, etc. These regions were further divided into fifteen countries, namely, the U.S.; Canada; Germany; the UK; Sweden; China; India; Japan; Australia; South Korea; Brazil; Mexico; UAE; KSA; South Africa.

All three above-mentioned market research methodologies were applied to arrive at regional-level conclusions. The regions were then summed up to form the global market.

Buy now pay later market companies & financials:

The buy now pay later market was analyzed via companies operating in the sector. Analyzing these companies and cross-referencing them to the demand equation helped us validate our assumptions and conclusions. Key market players analyzed include:

• Affirm Holdings, Inc. - Affirm Holdings, Inc. is a financial technology company that provides installment loans to consumers through point of sale solutions. The company offers an online platform that provides credit and lending services, as well as enables customers to buy the required item and pay in installments. The company’s online platform comprises three core elements, namely a point-of-sale payment solution for consumers, a consumer-focused app, and merchant commerce solutions. The point-of-sale payment solution enables customers to pay for purchases in fixed amounts without any penalties. The consumer-focused app provides Affirm products for a better customer experience. It allows consumers to access a personalized marketplace, open a saving account, and manage their payments. Additionally, the app allows merchants to offer customized offerings as per the consumer’s shopping habits, spending patterns, and purchase intent. The merchant commerce solutions empower merchants to efficiently promote and sell their products, drive incremental sales, and optimize customer acquisition strategies. As of September 2020, the company has 6,500 merchants and over 6.2 million consumers that have processed 17.3 million transactions on its platform. Affirm Holdings is headquartered in San Francisco, California, and is a leader in the buy now, pay later sector in the U.S., serving 16.9 million customers and over 266,000 merchants, as of 2023.

• Klarna Inc. - Klarna Inc. is a provider of shopping services and innovative payment solutions that offer direct payments, installment plans, and pay after delivery options to consumers. Klarna Holding AB, the parent company of Klarna Inc., operates through two main segments based on regions: DACH (Austria, Germany, and Switzerland) and Nordics (Norway, Sweden, Denmark, and Finland). Klarna Inc. offers solutions such as payment methods, marketing solutions, merchant portal, sales channel, and pricing. The payment methods solution includes buy now pay later services such as Pay in 4, Pay in 30, financing option up to 36 months, and Pay Later at any store, which are offered to customers and businesses. The company’s Klarna app allows shopping and payments in installments at a faster rate. Klarna Inc. offers a smarter shopping and purchase experience to 90 million customers and 250,000 merchants across 17 countries. The company is backed by investors such as Silver Lake, Sequoia Capital, Dragoneer, Bestseller Group, Visa, Permira, Atomico, and Ant Group.

• Splitit Payments Ltd. - Splitit Payments Ltd. is a U.S.-based company that offers flexible payment solutions to customers. It enables customers to pay for purchases with an existing credit or debit card by splitting the purchases into interest-free monthly installments without any additional approvals. The company has an R&D center in Israel and offices in Australia and London. It is listed on the Australian Securities Exchange (ASX) under the ticker code SPT. Splitit Payments Ltd. has partnered with BlueSnap, GlobalPayments, eft Pay, Shopify, Magneto, Big Commerce, and PrestaShop. The company offers solutions such as payment methods, marketing solutions, merchant portal, sales channel, and pricing. The payment methods solution includes buy now pay later services such as Pay in 4, Pay in 30, financing options up to 36 months, and Pay Later at any store, which are offered to customers and businesses. The company’s Klarna app allows shopping and payments in installments at a faster rate. Klarna Inc. offers a smarter shopping and purchase experience to 90 million customers and 250,000 merchants across 17 countries. The company is backed by investors such as Silver Lake, Sequoia Capital, Dragoneer, Bestseller Group, Visa, Permira, Atomico, and Ant Group.

• Sezzle - Sezzle is a financial technology-enabled company that provides a Buy Now Pay Later solution platform. The company’s mission is to financially empower the next generation by enabling merchants to offer consumer-friendly credit alternatives to their customers. Sezzle provides transparent, reliable, flexible, and secure payment options for retailers and consumers. It offers a buy now and pay later payment option for shoppers and provides splitit for business, splitit plus, and splitit in-store for businesses. The company primarily consists of lending to end customers in the U.S and Canada who purchase goods from the affiliated merchants. Sezzle also offers a mobile app called Sezzle - Buy Now, Pay Later, which allows users to shop in its online store, purchase items, and pay in installments over time. The company has partners such as ShipStation, Octane AI, Merchline.com, Inc, BWG Strategy, BVA, Comment Sold, and technology partners including Signifyd, ClearBanc, WunderKind, Comment Sold, and Octane AI. Sezzle is listed on the Australian Securities Exchange (ASX) under the ticker code SPT and offers its services to 90 million customers and 250,000 merchants across 17 countries.

• Perpay Inc. - Perpay Inc. is a financial service company that offers a payment and lending platform. The company provides an all-in-one fintech app with an income-based spending limit that provides automated direct deposit payments, resulting in a significant increase in credit scores, stable repayment behavior, and high rates of engagement. The company’s platform allows merchants and consumers to connect, transact, and complete the process through its web page or mobile app. Additionally, based on its customers’ feedback, the company offers enhanced features such as its new credit building product, Perpay+. Perpay offers its payment solution to brands such as Apple Inc, Nintendo, MCM, Samsung, Ashley Homestore, Michael Kors, and Kitchen Aid. It also provides a mobile app called Perpay - Buy Now, Pay Later, which is available on iOS and Android devices. Perpay is an online shopping marketplace that lets customers pay in installments and can help them build credit. The company charges no fees or interest on purchases and offers a 12-month payment plan without any extra interest charges.

• Zip Co Ltd. - Zip Co Limited is an Australia-based company that provides payment services. The company offers a range of simple and convenient financial products that deliver a value-added payment experience. Zip Co Limited operates through three segments, namely ZIP AU, Zip Global, and Spotcap. The company provides financial products such as Zip, Zip App, Zip Business, and Pocketbook. Zip is an interest-free digital line of credit that can be used across the Zip merchant’s networks. Zip App is a digital wallet with access to offers and exclusive deals from the Zip merchant network. Zip Business is an interest-free digital line of credit for small and medium-sized businesses to spread the cost of working capital. Pocketbook is a free financial app that is designed to help people manage their finances, budget, and savings. The company has marked its presence in the U.S., U.K., Australia, New Zealand, and South Africa. Zip Co Limited offers its services to retail, education, health, and travel industries, and others. The company has partnered with Google Pay and Primer to expand and optimize its payments stack. Zip Co Limited is listed on the Australian Securities Exchange (ASX) under the ticker code ZML and has 12 million total customer accounts across the group.

• Payflex - Payflex is an online payment platform that enables shoppers to buy now and pay later. It allows customers to pay for the purchase in four equal, interest-free installments over six weeks through cards such as Visa, American Express, and Mastercard. In September 2021, Zip Co. Ltd. announced the acquisition of Payflex to expand its footprint in South Africa.The company’s payment platform is integrated with cloud-based infrastructure to provide reliability, scalability, and security. Payflex aims to sign-up every eCommerce store on its payment platform so that shoppers in South Africa can pay with an interest-free payment plan. The company offers Payflex shoppers solution, which allows shoppers to shop in-store and pay in interest-free installments. It also offers Payflex merchants solution, which allows merchants to add the Payflex payment option to their payment gateway.eCommerce platforms such as Shopify, WooCommerce, OpenCart, Magento, and PrestaShop have integrated Payflex as a payment option to their gateways. The company also offers a mobile-based app called Payflex, available on Android and iOS devices. Payflex transactions are processed through Optty, a payment processing platform that enables merchants to accept payments from various sources, including credit and debit cards, mobile wallets, and bank transfers.

• PayJustNow - PayJustNow is a South Africa-based technology company that offers a buy now, pay later solution for shopping, allowing customers to split their purchase into three or more manageable payments. The company provides a payment option designed to allow shoppers to pay for products as they earn money, with no risk of growing charges. PayJustNow offers its payment solution for both shoppers and merchants. For merchants, the company offers a transparent fee structure that provides benefits such as full upfront payment, no risk, and increased customer satisfaction. The company uses Artificial Intelligence (AI), Progressive Web App (PWA), and cloud technology to provide a reliable and secure buy now, pay later payment option. It also offers online shoppers a faster way to sign up for the installment-plan purchasing while gathering valuable data that can drive more purchases as well as help retailers to improve customer experience and build a decision-scoring engine for recommendations to minimize risk and maximize returns. PayJustNow has partnered with various brands and retailers and offers shoppers the ability to make purchases over three equal and interest-free installments. The company’s website provides a shopper login and an FAQ section to assist users in understanding and managing their payments.

• TymeBank - TymeBank is a digital bank that offers a transactional bank account with zero or low monthly fees and a savings product. The company aims to provide South African users with affordable and accessible banking. It operates on a fully cloud-based infrastructure network. TymeBank’s product offering includes Personal Banking, Business Banking, and MoreTyme - a buy now, pay later payment solution. Personal Banking offers a saving tool known as GoalSave that grows users’ money at interest rates which increase over time. Personal Banking also provides services such as sendmoney, prepaid, Hollard insurance, and TymeHealth. Business Banking offers a bulk payment service that allows paying multiple business accounts at once. TymeBank provides ITS banking services through a banking app, online banking, kiosks, cell phone banking, ATMs, and Pick n Pay and Boxer till points. By leveraging sophisticated technologies and its strategic relationships with Pick n Pay and Boxer stores, the company has eliminated the need for physical branches. TymeBank is backed by investors such as African Rainbow Capital, JG Summit Holdings, Apis Partners, and Ethos Private Equity, among others.

• Mobicred (Pty) Ltd. - Mobicred (Pty) Ltd. offers a revolving credit facility that allows consumers to shop online safely with more than 1,600 online stores in South Africa. The company’s offering includes a buy now pay later payment solution that can be used by merchants to accept payments across online sales channels. These solutions are delivered to merchants by connecting them directly with the payment gateways. Mobicred for Merchants allows merchants to manage their profile, upload special documents, view their transactions, and generate custom reports. The company has integrated its solutions into major South African payment gateways such as PayU, PayFast, PayGate, Peach Payments, and wirecard. The company’s buy now pay later solutions are used by various online stores, such as Buco, Superbalist.com, Decofurn Furniture, South African Airways, Takealot Online (Pty) Ltd., Techmarkit, and CTM South-Africa. Mobicred is a simple and convenient revolving credit facility that allows users to safely shop online with more than 4,000 online stores in South Africa. The company’s product offering includes Personal Banking, Business Banking, and MoreTyme - a buy now, pay later payment solution. The company provides its banking services through a banking app, online banking, kiosks, cell phone banking, ATMs, and Pick n Pay and Boxer till points.

Value chain-based sizing & forecasting

Supply Side Estimates

• Company revenue estimation via referring to annual reports, investor presentations, and Hoover’s.

• Segment revenue determination via variable analysis and penetration modeling.

• Competitive benchmarking to identify market leaders and their collective revenue shares.

• Forecasting via analyzing commercialization rates, pipelines, market initiatives, distribution networks, etc.

Demand side estimates

• Identifying parent markets and ancillary markets

• Segment penetration analysis to obtain pertinent

• revenue/volume

• Heuristic forecasting with the help of subject matter experts

• Forecasting via variable analysis

Buy Now Pay Later Market Report Objectives:

• Understanding market dynamics (in terms of drivers, restraints, & opportunities) in the countries.

• Understanding trends & variables in the individual countries & their impact on growth and using analytical tools to provide high-level insights into the market dynamics and the associated growth pattern.

• Understanding market estimates and forecasts (with the base year as 2022, historic information from 2017 to 2021, and forecast from 2023 to 2030). Regional estimates & forecasts for each category are available and are summed up to form the global market estimates.

Buy Now Pay Later Market Report Assumptions:

• The report provides market value for the base year 2022 and a yearly forecast till 2030 in terms of revenue/volume or both. The market for each of the segment outlooks has been provided on region & country basis for the above-mentioned forecast period.

• The key industry dynamics, major technological trends, and application markets are evaluated to understand their impact on the demand for the forecast period. The growth rates were estimated using correlation, regression, and time-series analysis.

• We have used the bottom-up approach for market sizing, analyzing key regional markets, dynamics, & trends for various products and end-users. The total market has been estimated by integrating the country markets.

• All market estimates and forecasts have been validated through primary interviews with the key industry participants.

• Inflation has not been accounted for to estimate and forecast the market.

• Numbers may not add up due to rounding off.

• Europe consists of EU-8, Central & Eastern Europe, along with the Commonwealth of Independent States (CIS).

• Asia Pacific includes South Asia, East Asia, Southeast Asia, and Oceania (Australia & New Zealand).

• Latin America includes Central American countries and the South American continent

• Middle East includes Western Asia (as assigned by the UN Statistics Division) and the African continent.

Primary Research

GVR strives to procure the latest and unique information for reports directly from industry experts, which gives it a competitive edge. Quality is of utmost importance to us, therefore every year we focus on increasing our experts’ panel. Primary interviews are one of the critical steps in identifying recent market trends and scenarios. This process enables us to justify and validate our market estimates and forecasts to our clients. With more than 8,000 reports in our database, we have connected with some key opinion leaders across various domains, including healthcare, technology, consumer goods, and the chemical sector. Our process starts with identifying the right platform for a particular type of report, i.e., emails, LinkedIn, seminars, or telephonic conversation, as every report is unique and requires a differentiated approach.

We send out questionnaires to different experts from various regions/ countries, which is dependent on the following factors:

• Report/Market scope: If the market study is global, we send questionnaires to industry experts across various regions, including North America, Europe, Asia Pacific, Latin America, and MEA.

• Market Penetration: If the market is driven by technological advancements, population density, disease prevalence, or other factors, we identify experts and send out questionnaires based on region or country dominance.

The time to start receiving responses from industry experts varies based on how niche or well-penetrated the market is. Our reports include a detailed chapter on the KoL opinion section, which helps our clients understand the perspective of experts already in the market space.