CONSUMER SPENDING USING BNPL PLATFORMS TO HIT US$437 BLN IN 2027 - JUNIPER RESEARCH

KUALA LUMPUR, Oct 26 (Bernama) -- The consumer spending using Buy Now, Pay Later (BNPL) platforms will reach US$437 billion (US$1=RM4.73) globally in 2027, rising from US$112 billion in 2022, according to a new Juniper Research study.

“This sizeable growth of 291 per cent will be driven by escalating financial pressures from the rising cost of living and increasing demand for cheap credit solutions,” it said in a statement.

BNPL schemes allow consumers to pay using regular interest-free instalments, which is attractive to those reliant on credit for purchases. Additionally, the schemes only require soft credit checks, making it easier to access than credit.

The research found the most significant issue currently facing the BNPL market is the debt trap. Its lack of credit checks poses a considerable market hurdle as consumers are being approved for larger loans than they are actually able to repay.

However, the report predicts the introduction of financial regulations in several countries will help alleviate this issue as these new regulations are similar to existing credit services.

Meanwhile, in markets where regulations are softer, it is still vital that vendors act responsibly and clearly communicate all incurred debts promptly to users, helping minimise repayment default rates.

The research also predicts that BNPL vendors must look to provide services in alternative verticals to diversify their monetisation opportunities as e-commerce becomes oversaturated with solutions.

Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports, and industry commentary.

-- BERNAMA