Buy Now Pay Later firms have created one of the fastest-growing segments in consumer finance, with transaction volumes hitting US$120 billion in 2021 up from just US$33 billion in 2019, according to GlobalData.
The model proved popular among young consumers during the COVID-19 pandemic as e-commerce volumes soared, with Buy Now Pay Later transactions accounting for US$2 in every US$100 spent in e-commerce last year, according to GlobalData.Article content “Right now there’s more caution and less interest because of the financial risks that could become apparent here if we are in an economic slowdown or a potential recession,” said Bryan Keane, senior payments analyst at Deutsche Bank.
For smaller players, many of them fledgling start-ups, accessing funding to lend to shoppers will become more difficult.