Quarterly Trends Report

Financials trends report: what's next for BNPL?

  • Public Equity
  • Financials
  • North America
  • q2 2022

Payment methods have evolved dramatically in recent years off the back of a booming e-commerce landscape, and the rising popularity of buy now, pay later (BNPL) is no exception. But with many of the COVID-19 pandemic-related tailwinds now in the rear-view mirror, including digital adoption and stimulus payments, experts interviewed by Third Bridge Forum are observing a convergence of BNPL offerings.

“The truth is that BNPL is still in the really early stage of its development,” a former divisional leader at Affirm Holdings Inc told us. However, the future is seemingly full of opportunity. The expert said there are estimations that total processing volumes (TPV) could increase from USD 90bn in 2021 to USD 4tn by 2030. “For any of the players to actually thrive and become the Google of BNPL, how can they strategise their pricing or revenue model to capture a bigger share of the USD 90bn or USD 4tn TPV share?”

For context, there are two main types of BNPL offerings: closed and open-loop providers. The former includes companies such as Affirm, Klarna and AfterPay that serve as single providers for the solution, managing consumer lending as well as merchant relationships. The other “fast-growing” side are networks such as Visa, Mastercard, Amex and Discover. “Both achieve similar end purchasing experience but the business model and the go-to-market strategy and the potential market adoption can be very different,” the former divisional leader at Affirm Holdings Inc said. 

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