Buy Now Pay Later Market Opportunities and Strategies to 2033

This report describes and explains the buy now pay later market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global buy now pay later market reached a value of nearly $260.48 billion in 2023, having grown at a compound annual growth rate (CAGR) of 57.4% since 2018. The market is expected to grow from $260.48 billion in 2023 to $1.48 trillion in 2028 at a rate of 41.7%. The market is then expected to grow at a CAGR of 14.9% from 2028 and reach $2.97 trillion in 2033.

Growth in the historic period resulted from the increase in adoption of online payments, emerging markets growth, increasing government support and increased disposable income. Factors that negatively affected growth in the historic period include the rise in cyber security concerns.

Going forward, the rising internet penetration, increase in the growth of e-commerce, growing number of smartphone users and rising urbanization will drive the market. Factors that could hinder the growth of the buy now pay later market in the future include a lack of awareness of BNPL services and high availability of multiple payment options and rising fraud cases.

The buy now pay later market is segmented by channel into online and POS. The online market was the largest segment of the buy now pay later market segmented by channel, accounting for 98.2% or $255.67 billion of the total in 2023. Going forward, the POS segment is expected to be the fastest growing segment in the buy now pay later market segmented by channel, at a CAGR of 46.1% during 2023-2028.

The buy now pay later market is segmented by enterprise size into large enterprises and small and medium enterprises. The large enterprises market was the largest segment of the buy now pay later market segmented by enterprise size, accounting for 74.3% or $193.63 billion of the total in 2023. Going forward, the small and medium enterprises segment is expected to be the fastest growing segment in the buy now pay later market segmented by enterprise size, at a CAGR of 44.6% during 2023-2028.

The buy now pay later market is segmented by end-use into consumer electronics, fashion and garment, healthcare, leisure and entertainment, retail and other end-uses. The consumer electronics market was the largest segment of the buy now pay later market segmented by end-use, accounting for 38.8% or $101.09 billion of the total in 2023. Going forward, the healthcare segment is expected to be the fastest growing segment in the buy now pay later market segmented by end-use, at a CAGR of 49.7% during 2023-2028.

Western Europe was the largest region in the buy now pay later market, accounting for 47.7% or $124.28 billion of the total in 2023. It was followed by North America, Asia-Pacific and then the other regions. Going forward, the fastest-growing regions in the buy now pay later market will be Asia-Pacific and North America, where growth will be at CAGRs of 50.4% and 41.1% respectively. These will be followed by Western Europe and South America, where the markets are expected to grow at CAGRs of 39.2% and 32% respectively.

The global buy now pay later market is highly fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 2.45% of the total market in 2023. Block, Inc was the largest competitor with a 1.14% share of the market, followed by Affirm Holdings Inc. with 0.43%, PayPal Holdings Inc. with 0.34%, Klarna Bank AB with 0.13%, Mastercard Incorporated with 0.10%, PayU with 0.08%, Shop Pay Installments (Shopify Inc.) with 0.07%, Sezzle with 0.061%, Latitude Group Holdings Limited with 0.059% and Visa Inc. with 0.04%.

The top opportunities in the buy now pay later market segmented by channel will arise in the online segment, which will gain $1.19 trillion of global annual sales by 2028. The top opportunities in the buy now pay later market segmented by enterprise size will arise in the large enterprises segment, which will gain $870.16 billion of global annual sales by 2028. The top opportunities in the buy now pay later market segmented by end-use will arise in the consumer electronics segment, which will gain $472.88 billion of global annual sales by 2028. The buy now pay later market size will gain the most in Germany at $204.0 billion.

Market-trend-based strategies for the buy now pay later market include focus on offering diverse payment options to enhance flexibility, use of AI-powered buy now pay later (BNPL) services for providing user-friendly experience, strategic partnerships and collaborations among market players and integration with cloud based payment solutions to improve operational efficiency.

Player-adopted strategies in the buy now pay later market include focus on strategic acquisitions of fintech firms to enhance financial product offerings and expand BNPL services to a wider customer base, strategic partnerships with major e-commerce platforms to offer flexible payment solutions, launching flexible payment solutions to enhance customer accessibility and drive sales, AI-driven customer service tools to enhance efficiency and strengthen payment services through strategic partnerships.

To take advantage of the opportunities, the analyst recommends the buy now pay later companies to focus on expanding flexible payment options, focus on integrating AI for enhanced service and risk management, focus on leveraging cloud technology for operational efficiency, focus on point-of-sale segment for accelerated expansion, focus on expanding distribution channels for BNPL companies, expand in emerging markets, continue to focus on developed markets, provide competitively priced offerings, participate in trade shows and events, continue to use B2B promotions, focus on targeting consumer electronics segment to drive growth and focus on small and medium enterprises segment for rapid growth.