Reasons why the BNPL industry is expected to grow rapidly

BNPL is a massive $7B industry and is expected to grow at least 10 to 15 times its current size. This payment trend was launched in 2015 by Afterpay in Australia but has gained popularity over the last two years. 

Since BNPL was introduced to reduce the friction between customers and merchants, it has transformed the online shopping experience for both. This trend has gained momentum and is expected to proliferate, and there are many good reasons for it. Let’s find out some of them here!!

• It sounds “Cheaper.”

The first reason this trend is getting popular, especially among millennials, is that it sounds affordable. Although the consumers have to pay the entire amount eventually, taking away your favorite product without giving a single penny offers another level of satisfaction, at least according to The Pearl Source, a pearl retailer specializing in all kinds of high-end pearl jewelry.

“It’s a tempting proposition,” said Leon Rbibo, President of The Pearl Source. “Consumers want options for everything, and that includes payment.”

BNPL is an interest-free option which means that, unlike credit or debit cards, this option will finance your purchase without any interest charges. Since it saves you the interest fee, it automatically becomes cheaper than other financing options available in the market. Some experts reveal that the younger generation is steering clear of the traditional credit or debit card options because of the financial crises, which adds fuel to the growing popularity of the BNPL. 

• It offers a better customer experience.

This flexible payment option not just allows you to enjoy interest-free shopping but also offers a smooth and seamless experience to the customers that they want to enjoy over and over again. 

The straightforwardness of BNPL has made this option flexible and easy to use for many. It doesn’t require much documentation and other formalities and keeps the process simple. 

• It helps in maintaining customer loyalty.

BNPL is playing for both customers and merchants alike. By offering a seamless shopping experience, it helps in maintaining the customers’ loyalty. People who know this option is available on an e-commerce store will likely get back to you for the next big-ticket item instead of wasting time in finding this option on another store. 

According to a survey, 90% of Afterpay’s transactions are from the returning customers who use this platform for 9 times a year on an average. 

• It is a safe payment option.

Of course, safety cannot be overlooked when it comes to online shopping. It might seem surprising or fraudulent at a glance that someone else is paying for your purchase without any interest fee, but the truth is far away from this thought. Buy Now Pay Later is one of the safest financing options to choose from. This reliable method assures you when you are looking to purchase an item from a new retailer. 

• It allows “controlled spending”

BNPL fuels the need for instant gratification and lets you take the items you really want without having to reach into your savings. But unlike credit or debit cards, this financing method allows a person to shop in a ‘controlled’ manner. Also, it eliminates the worry of receiving a surprise bill at the end of the month.