BNPL is alive but changing
Despite the struggles faced by pure play BNPL providers, the payment option looks like it will survive, boosted by popularity among younger people. But it's the established players who may benefit the most.
There's some good news at last on the buy now, pay later (BNPL) front, at least according to global payments fintech Worldpay.
BNPL has reached “terminal velocity” in Australia, says Worldpay’s 2024 Global Payments Report (although strictly that term refers to the maximum speed an object falling from a height attains.)
Worldpay says the payment option is “at an all-time high, representing 15% of ecommerce transaction value in 2023 (and) is projected to maintain a 15% share of Australia’s ecommerce spend through to 2027, when it will account for approximately USD$10.1 billion [$15.2 billion]”. Although the report does also note “stress” in the BNPL business model.
The prevailing view is more negative, though. Despite its prominence, BNPL’s share of overall payment volumes remains negligible and the revenues are not enough to support a standalone business — hence companies like Block and Zip are now pushing traditional credit cards (which BNPL was launched to supplant).
