Buy now, pay later is here to stay.
A year ago, the biggest players in the industry were companies founded just to offer consumers the option of paying in installments at the point of sale. Swedish Klarna, Australian Afterpay and American Affirm were the main names associated with BNPL.
But the landscape is very different now that more companies recognize the opportunity and fight for a piece of the pie. Last month PayPal spent $ 2.7 billion on Japanese Payy in an effort to break into the Asian market. In early August, Square announced plans to acquire Afterpay in a $ 29 billion deal. It is even said that Apple is launching into the BNPL game.
Today’s BNPL space sees a slow emergence of a symbiotic relationship between traditional financial institutions, newcomers and large corporations. As credit and charge card companies see BNPL as a new growth opportunity, incumbents like Klarna and Affirm are looking for ways to make their installment loans accessible to more consumers.
The bigwigs enter the fray
Now that consumers are increasingly comfortable with BNPL’s services, major credit card providers are taking steps to ensure they aren’t left behind. Visa said on Wednesday that a “growing list” of issuers, acquirers and fintechs were using its technology to offer BNPL options to their customers.
In a statement, Mary Kay Bowman, senior vice president of Visa and global head of payment and platform products, said the company has “been enthusiastically embracing BNPL” for years “as it expands choice and convenience. for buyers and sellers ”.
“If buyers prefer a fintech solution from BNPL, we are here and we make it possible,” she said. “If they want an option from their bank, we help them offer it to them as well. Interestingly, Visa today said it has signed a “global brand agreement” with BNPL giant Klarna to accelerate its expansion and expansion into several markets.