Buy Now Pay Later (BNPL) deferred service has been growing rapidly for over 3 years. However, despite this rapid growth, market experts believe that in the face of rising interest rates and expensive money, consumers’ potential for excessive indebtedness will decrease. This, in turn, means that the current BNPL model will have to change. In which direction can the service evolve? We have analyzed several probable directions.

 What is BNPL?

BNPL is a service that allows customers to make purchases and then defer payment for 30 or even 45 days. It is a type of installment loan that typically allows you to purchase something immediately with little or no initial payment and pay off the balance over four or fewer payments. BNPL also promotes better budget planning.

The increasing popularity of BNPL in e-commerce

E-commerce is currently one of the fastest-growing sectors of the economy worldwide. In such a dynamic industry, BNPL is a powerful sales booster – it doesn’t only increase the number of customers and revenues, but also promotes customer loyalty. Additionally, BNPL is increasingly used in e-commerce for follow-up abandoned carts to encourage customers to complete their purchases. Most of the European sellers and marketplace platforms are considering (or have already introduced) their own BNPL solutions. Such a service is already offered e.g. by the leader of the Polish e-commerce platform Allegro, as well as by Amazon, which offers a BNPL service for selected products and suppliers.

Expansion of product range

Buy now, pay later (BNPL) services have seen significant success in the past few years, especially in the areas of apparel, electronics, and appliances. It is predicted that in 2023, this trend will continue, but new product categories will be covered by this form of funding. We can expect BNPL to be offered in the furniture, automotive, and real estate sectors. There will probably show up “rent to own” options allowing customers to rent the product for a specific time, after which they can purchase it. BNPL is also likely to appear in the travel industry. A couple of months ago, Afterpay – an Australian BNPL operator, announced a partnership with Expedia, which specializes in online travel purchases for individual customers and small businesses. As part of the collaboration, customers received the option to pay for trips worth up to 2000 dollars in installments. According to the company’s representatives, in the next few years, travel will become one of the most frequently financed expenditures through BNPL by consumers.

According to Afterpay, in the next few years, travel will become one of the most frequently financed expenditures through BNPL by consumers.


BNPL as a credit card alternative

The BNPL service is becoming increasingly seen as an alternative to credit cards, especially now – as consumers feel the effects of inflation and many are in a worse financial situation than a year or two ago. More and more consumers are choosing BNPL, as it is more flexible and allows for greater control over expenses. In a survey conducted by The Ascent, 62% of respondents expressed the belief that “BNPL is a solution that will completely replace the credit card in the future.” Similar conclusions can be drawn from analyzing the results of a survey conducted by the Insider Intelligence service. On the question of reasons for using deferred payments, 39.4% (the dominant percentage) of respondents indicated they “wanted to avoid paying with a credit card.” In addition, one – sixth of the survey participants chose BNPL because “they don’t like using credit cards.

Mergers and Acquisitions in the BNPL Industry

The rapid development of BNPL has attracted many new players offering the service to the market, including banks that are introducing their own “Buy Now Pay Later” versions and start-ups trying to offer deferred payments in various niche sectors. However, the main international market players, such as Klarna, Affirm and ZIP, are still striving for profitability. As part of these efforts, they are making acquisitions and transitions, including the acquisition of Square Inc. by ZestFinance and the acquisition of Behalf by Klarna. Any analysis of the development of the BNPL industry indicates that this trend will also continue in the current year.


The increased governement’s control over BNPL services may help sellers avoid potential allegations of unfair practices.


Regulatory Oversight of BNPL

As BNPL is seen as a close substitute for credit cards, regulators are paying more and more attention to deferred payment services. According to a report published by PwC, many countries are now considering regulations on BNPL to protect consumers from excessive debt. Governments around the world are particularly concerned that, since BNPL payments are largely used mainly by young users, they may not be prepared for later repayment of their debts. As the BNPL sector continues to rapidly develop, it is more likely than ever that regulations and controls will increase. However, this may be good news for sellers, as increased control over services may help sellers avoid potential allegations of unfair practices.

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