'Buy now, pay later' transactions on the rise in APAC
The payment option has big potential in markets like India with low credit card penetration.
Buy now, pay later (BNPL) transaction has emerged as a viable credit option amongst e-commerce purchases in Asia Pacific as several payment companies are now offering this service, according to a report from GlobalData.
“BNPL provides consumers with the flexibility to pay for their purchases at later dates. In addition, unlike traditional credit cards or consumer loans, there is no fee if payments are made on time,” GlobalData’s lead banking and payments analyst Ravi Sharma said.
The payment option is considered to be popular in Australia with 5.8 million accounts, as the entry of global players further fostered growth in the country. Other Asian markets like China and India have also registered similar trends.
In countries like India in particular, where there is low credit card penetration and limited access to formal credit, BNPL has huge potential, the report stated.
“With consumer spending on the rise, BNPL concept presents a huge potential in the APAC region and has the potential to challenge the existing credit models,” Sharma said.
The e-commerce market in the region is set to grow at a compound annual growth rate of 17.6% from $1.2t in 2016 to $3.6t in 2023.