Commerce has come a long way in the 21st century; it has evolved from the simple act of exchanging banknotes for goods, to the current digital age where you can make transactions by a digital currency mined by someone on the other side of the planet.
Commerce transformed into eCommerce, and with it came a plethora of strategies, payment methods, and gateways that can give you the option to pay at your convenience based on your preferences.
As such, technology took financial services and procedures to the digital realm, and then birthing the popular eCommerce strategy of Buy Now Pay Later, that many have found to be go-to method of payment when online shopping.
A new study from Juniper Research has found that spending via buy now pay later services, which are integrated within eCommerce checkout options, including fixed instalment plans and flexible credit accounts, will reach $995 billion in 2026, from $266 billion in 2021.
This 274 percent growth will be fueled by a greater appetite from users for credit to spread costs, particularly in the wake of the pandemic, which has put extreme pressure on user finances.
The research identified that, while regulations will inevitably place restrictions on services, such as limiting charges or enforcing affordability checks, these changes will not diminish the appeal or growth of the platforms; merely placing them on a more secure footing.
The report recommends that vendors focus on improving the transparency and use of credit assessment and reporting now to minimize future disruption.
Buy Now Pay Later a go-to eCommerce
The new research, Buy Now Pay Later: Vendor Strategies, Regulatory Frameworks & Market Forecasts 2021-2026, found that, by 2026, buy now pay later services will account for over 24 percent of global eCommerce transactions for physical goods by value, from just 9% in 2021.
“As a tool to split the cost for users, buy now pay later is ideally suited for high-cost items, as it enables users to seamlessly split large costs into smaller, more manageable payments. By 2026, these platforms will increasingly become the norm for lower-cost purchases as well; driven by user demand and eCommerce platform integrations,” Research co-author Damla Sat explained.
Buy Now Pay Later to reach 1.5 billion in 2026
The research also found that the global number of buy now pay later users will exceed 1.5 billion in 2026, from 340 million in 2021.
In turn, the report recommends that eCommerce merchants must integrate buy now pay later services immediately, or risk losing transactions to other payment platforms which offer preferable payment options.