Buy now, pay later (BNPL) is an emerging trend that has quickly gained traction. It allows consumers to purchase goods and services immediately while deferring payment over a series of installments, often without interest or fees if payments are made on time.
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The growth trajectory of BNPL services is remarkable, with Juniper Researchforecasting an increase from 380 million users in 2024 to more than 670 million worldwide by 2028. This substantial growth of 107% will be driven by the anticipated economic slowdown, which will increase demand for low-cost credit instead of traditional banking solutions.
Demographically, BNPL services are particularly popular with younger consumers around the world. According to statistics from
LexisNexis Risk SolutionsConsumers aged 35 and under make up 53% of BNPL users, compared to just 35% of traditional credit card holders. Millennials have begun using BNPL at a higher rate than other generations, with nearly 45 million millennials expected to use proximity mobile payments in 2024, more than any other generation.
This trend is driven by several factors: Many young consumers are still building their financial independence and may have limited access to traditional credit. BNPL offers a flexible alternative to credit cards, often without requiring a strong credit history. Additionally, younger consumers prefer to avoid traditional debt and the high interest rates associated with credit cards. They are also more digitally savvy and value instant access to experiences. This highlights a significant shift in spending habits, with young people increasingly opting for BNPL to manage their cash flow and finance everyday purchases.
The evolution of BNPL towards Live Now, Pay Later
The Buy Now, Pay Later model, once a niche financial product, has undergone a major transformation, expanding into what is now known as Live Now, Pay Later (LNPL). This development reflects a shift in consumer preferences, particularly among younger generations who value experiences over material possessions. As younger consumers increasingly value flexibility and immediate access, LNPL has become a preferred financial solution. Live Now, Pay Later takes the central idea of BNPL and applies it to various aspects of life.
1. Send (or pay) now, pay later
Companies like Remitly and Western Union are exploring installment remittance services to meet the needs of consumers who need urgent money transfers but can’t afford the upfront cost. These platforms allow users to instantly transfer money to friends, family or businesses with the option to repay in installments, providing crucial support to those facing immediate financial demands.
THE Digital Remittance Market is expected to reach USD 150.80 billion in transaction value in 2024, with an annual growth rate of 4.76%, totaling USD 181.60 billion by 2028. The number of users in this market is expected to reach
18.74 million by 2028. This integration of ВNPL into remittance services reflects a broader trend towards flexible financial solutions in everyday transactions.
2. Fly now, pay later
Companies like Uplift and Klarna allow customers to book flights and accommodation immediately and pay in installments later. According to
The Deloitte report When it comes to travel trends, 75% of travelers are more likely to choose a BNPL option to finance their trips. This flexibility allows travelers to select the method best suited to their needs.
Interestingly, BNPL also encourages consumers to opt for more premium options, such as luxury accommodations or first-class tickets, thereby improving their overall travel experience and generating higher sales for agencies of travel. This trend is particularly significant among Millennials and Generation Z, who are expected to become the biggest spenders on travel.
3. Rent now, pay later
Companies such as Flex and Domuso are pioneering rent payment plans that allow tenants to move into a property immediately and pay their rent in installments, with no upfront fees or interest charges. This approach not only improves affordability, but also expands access to housing for people who may face financial constraints.
Given the current economic landscape characterized by rising interest rates, surging real estate prices, and increasing demand for rental properties, the rental market is expected to grow up to
$3,749.95 billion in 2028with a compound annual growth rate (CAGR) of 7.5%. In this context, BNPL services are becoming increasingly popular in the rental sector.
4. Ride now, pay later
Ride-sharing giants such as Lyft and Uber are actively exploring BNPL models to improve ridership. For example, in
April 2024Uber has partnered with Klarna to introduce installment payment options. With nearly 9.5 billion trips made on Uber in 2023, an average of 28 million trips per day in the fourth quarter of 2023 alone, this represents an average of 28 million trips per day, or more than a million per hour.
This type of BNPL integration will particularly benefit markets where daily travel costs pose financial challenges for low-income individuals. This approach not only attracts more travelers, but also provides them with the flexibility to manage transportation expenses more effectively, contributing to greater mobility and convenience.
5. Learn now, pay later
Companies like EdAid and Skills Fund are leading the way in offering financing for courses and bootcamps with deferred payment plans. The integration of BNPL into the education sector highlights a trend towards flexible financial solutions that meet the changing needs of learners.
This approach is particularly beneficial for individuals from underserved and low-income communities, making education more financially feasible and inclusive. The number of users in the online education market expected to reach
1.121 billion by 2029The effectiveness of educational institutions lies in their ability to facilitate online payment capabilities, thereby allowing students to manage costs.
6. Party now, pay later
BNPL has also made its way into the entertainment industry with services that allow users to “party now, pay later.” This innovative approach allows consumers to purchase tickets to concerts, festivals and other events and pay for them over time, easing the immediate financial burden. By allowing fans to enjoy their favorite events with no upfront costs, BNPL services have made entertainment more accessible.
This aligns with the preferences of Millennials and Generation Z, who increasingly prioritize experiences over material possessions. Three out of four millennials prefer to spend on experiences rather than products, seeking unique, immersive activities that create lasting memories. The events industry has tapped into this trend by adopting services like Afterpay and Klarna, which offer flexible payment options to attendees.
7. Play now, pay later
Platforms like Razer Gold allow players to purchase virtual goods on credit, making it easier to acquire in-game currencies, items, or subscriptions without the immediate financial burden.
A recent report from Statist shows that global gaming market revenue is expected to reach $455 billion in 2024, with in-app purchases accounting for a substantial portion of this revenue. As BNPL services continue to gain momentum, more players are likely to use these options to enhance their gaming experience, thereby driving growth in the sector.
A Future Perspective of BNPL
Buy now, pay later (BNPL) has quickly become an integral part of daily life, significantly impacting the traditional banking sector. According to
JD Poweroverall customer satisfaction with BNPL services increased by 16 points year-on-year, thanks to reasonable conditions, ease of use and high security of sensitive data. As the industry continues to mature, we can expect new fintech providers to emerge globally, which will likely lead to a shift from traditional credit to more innovative payment systems.
BNPL covers a wide range of B2C activities and its applications are increasingly tailored to specific needs. From “Party Now, Pay Later” for the entertainment industry, “Learn Now, Pay Later” for education, to “Ride Now, Pay Later” for transportation and “Play Now, Pay Later” for pay later” for games, the possibilities are virtually endless. . This trend reflects a significant shift in the way consumers manage their finances, seeking flexible and accessible payment options.
The growing prevalence of BNPL has prompted banks and credit card companies to embrace this trend to gain a competitive advantage. Institutions like Citibank, HSBC and American Express have introduced BNPL products, allowing customers to split payments into interest-free installments seamlessly integrated with banking apps. Some of them exemplify this approach, allowing customers to easily manage large purchases through their mobile banking platform. These initiatives not only improve choices and conditions for consumers, but also build business confidence, thereby mitigating the fraud risks associated with unregulated BNPL providers. Forecasts predict more
10 billion BNPL transactions by 2028, highlighting its creation as an essential tool of modern financial services.
According to the PYMNTS ReportBNPL has cemented its place within the financial services ecosystem, providing crucial access to credit to those underserved by traditional methods. As regulatory frameworks evolve, continued growth in consumer confidence and adoption of BNPL is expected, strengthening its role as an indispensable component of future financial strategies.