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Why consumers love BNPL

Who does what in the BNPL ecosystem?

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The Lafferty Executive Report titled Why Consumers Love BNPL: Who does what in the BNPL ecosystem delivers insights into why online buyers – and investors – have embraced buy now pay later in the last 18 months. And BNPL is not just for people seeking better value than purchasing goods or services by credit card: it appeals also to affluent buyers.

The major players in BNPL are fintechs born in the internet age that have deep expertise in credit risk analysis and fraud management. But banks are now embracing BNPL through partnerships. There's no doubt that BNPL is a threat to the tremendous profits generated by the credit card industry, as Gen X and Gen Z both shun credit cards and embrace online buying. BNPL is not going away anytime soon.

The report covers:

  • The transition from lender to platform
  • BNPL: Merchant origins, Real time players, and Open banking
  • The secret sauce of the BNPL players
  • The relationship between merchant acquiring and customer acquisition
  • Case studies of PayPal, Affirm, AfterPay, Klarna, Splitit, Carbon, Simpl
  • Why Australia moved first on BNPL
  • Regulating BNPL nationally and regionally

Buy Now Pay Later is finding favour as consumers and businesses alike turn to instalment buying as an alternative to credit cards for online purchases. It's the result of several trends meeting because of the shock to the global system from the Covid-19 pandemic.

  • The pandemic has accelerated digital transformation;
  • Younger consumers are shunning credit cards;
  • Buy Now Pay Later schemes are perfectly poised for consumers turning en masse to online shopping;
  • Merchants find that BNPL users spend more money and that BNPL has a higher conversion rate than other purchase methods;
  • Consumers love buy now pay later for its ease of use and the transparency of pricing;
  • Ecommerce acquirers are assembling a digital value chain.

Order your report here.

Retail Banking Institute

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