Navigating the future of fintech: Exploring the buy now pay later
Conventional BNPL involves a 20-25% down payment, followed by interest-free instalments over weeks or months. However, each BNPL program comes with distinct prerequisites that patrons must fulfil.
In recent years, the landscape has shifted from catering solely to a specialised consumer segment to emerging as one of the foremost payment mechanisms, fuelled by digitalization, e-commerce expansion, credit card rate hikes, and popularity among younger demographics.
While the concept of instalment payments is nothing new, the currently ongoing digital age has breathed a new life into it. Now, instalment payments are available for all products irrespective of size, both offline and online.
According to Juniper research1, BNPL payments are expected to make up nearly 24% of global ecommerce transactions by 2026, a significant increase from just 9% in 2021. Insider intelligence predicts2 that nearly 60% of Gen-Z and 53% of millennials will make BNPL payments by 2026, in the US.
The global BNPL market3 was valued at $6.13 billion in 2022 and is expected to grow at a CAGR of just over 26% from 2023 to 2030.
In terms of payment transaction value, the BNPL transaction4 hit $200 billion in 2022.
In the UAE, the BPNL has experienced remarkable growth, propelled by the increased penetration of ecommerce, in the entire MENA region, thus warranting close attention from both startups and investors. According to a report5 from Euromonitor International and Dubai e-commerce zone EZDubai, the total market size for e-commerce in the MENA region was valued at $31.7 billion in 2021 and is expected to reach $49 billion by 2025.
