Buy Now, Pay Later (BNPL) products allow people without a credit card to buy in installments in online and physical stores, through an immediate loan at the time of purchase. It is a model that several fintechs around the world have promoted in recent years where they automate the approval of a loan so that it can be a very fast process, not like before where the process could take days and require face-to-face procedures. BNPLs are commonly integrated into the payment section of online stores. Sweden's Klarna is considered the largest global BNPL player and one of the world's best-valued startups. It is followed by Afterpay from Australia, bought last year by Twitter founder Jack Dorsey. There is also Affirm, Zip, Sezzle, in addition to the pioneer of online payments PayPal, which in 2020 launched Pay In 4, its own BNPL within its service. In LatAm, the fintech Addi (Colombia), Atrato (Mexico) and KueskiPay (Mexico) are among the pioneers of a model that, although it does not have the market penetration of the first world, has the potential to grow in the region because almost 50% of the population is not banked and only 15% use a credit card. A Clearpay study found that 42% of Gen Z shoppers and 69% of Millennials are more likely to purchase items if they can split the payment, which directly leads to improved conversion rates. But there are other advantages that may go unnoticed at first:
In the following image we can see the results of a study carried out by the Reserve Bank of Australia in partnership with IBISWorld where it is clearly seen how the use of credit cards has decreased and the revenue of BNPL has increased in the country in the last years.
