How Buy Now Pay Later (BNPL) is Looking to Shape 2021


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The year 2020 came as a surprise to the world. The Covid-19 virus affected millions of people across the globe and the lockdown which followed to contain the virus had a massive impact on the global economy. Many small businesses got shut and people lost their jobs. Pay cuts have become a common practice across all industries throughout the world. This gloomy economic scenario is no doubt a deterrent to consumers trying to buy their daily essentials or even an item of comfort or luxury.

Amidst all the uncertainty and a sad economic state of affairs, the only silver lining that the consumers are attaining globally is the shopping experience with Buy Now Pay Later (BNPL), a technology that provides instant frictionless online transaction.

Understanding BNPL

With the lockdown and the COVID-19 trauma, as we are slowly heading towards 2021, it looks like BNPL e-commerce is here to stay. For starters, BNPL is a payment technology that allows a consumer to make a purchase without having to pay for it until a later date. And if the consumer pays the due in the agreed stipulated period of time, which may vary from a fortnight to a month to a few months, depending on the service provider, the service is interest-free.

Interestingly, BNPL the current darling of the fintech world is not new to the traditional Indian trading practice of Khaata. In our economy, the micro-credit system of Khaata has been in practice from centuries where a merchant would allow a customer to buy a product and pay the due back in a months’ time. In a way, this traditional system of trading has been refined and secured with technology for today’s world.

Globally there are many players in the BNPL world. Simpl is one such homegrown fintech company which works between merchants and consumers in facilitating frictionless e-commerce transactions.

Here’s why we feel BNPL is here to stay

The skepticism and fear instilled in consumers in light of this pandemic will impact the market sentiments for some time; this could even last until the vaccine is launched and tested in humans. Restricted spending behaviour is expected in the consumer fearing future uncertainty. This will work for the BNPL companies who are instilling confidence in the customer with this micro-credit option. This will help consumers to make purchases without any financial strain or the burden of interest if paid within the set time frame.

Role of Technology

A boom in technology will play a crucial role in augmenting the BNPL sector. As all e-commerce payments are made using the internet, easy accessibility of affordable data plans, cheap smartphones and other tech advancements will play a crucial role in the growth of the fintech market.

Millennials and Gen Z

Rise of the millennials and generation Z in the coming years will change the spending pattern in the e-commerce world in a way that will help propel the Buy Now Pay Later companies. Millennials and gen Z are wary of the traditional credit system. Our current credit lending tools like credit cards have a longer processing time, annual maintenance fee and heavy interest rates which give an edge to the BNPL system which is fast, has easy payment options, no interest (if paid on time), no maintenance fee and no paperwork. This gratification to the consumers’ needs surely works in favour of the BNPL Market.

Favourable Market Trend

The market trend for BNPL companies looks promising and hence proves that the coming days will be quite interesting.  According to market reports, the industry is all set to grow 10 per cent every year. And indeed there has been heavy growth in the number of new BNPL companies across the globe. Major acquisitions and market expansion of global BNPL giants are taking place. Also, big e-commerce players like Amazon and fortune group are jumping into the BNPL foray. This is indicative of the bright future this industry may have.

The price of a company share in the stock market sometimes speaks volume about the worth of a particular company and also indicates the growth or decline of the sector where the company belongs to. The BNPL stocks in NYSE, Asian markets and the European share market, is doing quite well for a couple of years now. The American media covered extensively when a US-based BNPL giant went public last year. 

If the fintech industry experts are to be believed, the coming years will provide a fertile ground for the BNPL market as the growth in technology will make the Pay Later services easy to consume in this uncertain economic times.


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