Two major US buy now, pay later (BNPL) providers took steps that will help them extend their offerings to new merchants in the US market:
The moves come as BNPL adoption surges in the US amid the pandemic. In March 2021, 55.8% of US consumers had used BNPL technology—a drastic increase from the 37.7% who had reported doing so last summer, according to The Motley Fool. Though the tech was gaining traction before 2020, the pandemic was an inflection point: Increased precautionary behavior led some shoppers who moved away from credit cards to embrace BNPL as a lower-risk alternative that still offered some payment flexibility. The payment method’s popularity will only continue—FIS expects North American transaction share will nearly triple by 2024—as BNPL providers develop more robust offerings, habits formed during the pandemic stay the course, and younger consumers gain spending power.
Adding new offerings could help providers grow their reach and stand out against competition—while also diversifying their businesses. BNPL’s increasing popularity is pushing established giants deeper into the space while players across the map forge major retail partnerships, including moves into niche spaces like travel or professional services, as a way to build brand loyalty and break through the noise. Tapping into new sources of potential client acquisition, as Affirm is through Returnly or Splitit is through its new gateway’s value-adds, could help these brands reach untapped areas of the market and increase brand loyalty. And with regulations emerging in some regions, diversifying their offerings could help providers add new paths to growth in case tighter rules follow in the US market.