Raynor de Best
Content expert covering payments and (crypto)currencies
BNPL (Buy Now, Pay Later) - statistics & facts
Digital payment options like PayPal’s Pay in 4, Klarna, Afterpay, and Affirm grown increasingly popular in online shops across the world. The market size of these brands differs significantly, however. Sweden's Klarna reached a gross merchandise volume in 2022 that was three times that of other "pure play" buy now, pay later options Afterpay and Affirm. This comes back in the BNPL market share in over 40 domestic e-commerce markets worldwide, which was highest in Northwestern Europe. Whether the absolute number of users of BNPL was also the highest in Europe is not clear, as densely populated markets like Indonesia, Malaysia, and Vietnam boasted millions of BNPL users in 2022.
A major buzzword in and by itself, BNPL re-interprets loans and consumer behavior. It is not regulated anywhere, however. This makes it difficult to find consistent data and compare countries against each other. Nevertheless, what are the main global developments one should keep an eye out for in 2023 and 2024?
A major buzzword in and by itself, BNPL re-interprets loans and consumer behavior. It is not regulated anywhere, however. This makes it difficult to find consistent data and compare countries against each other. Nevertheless, what are the main global developments one should keep an eye out for in 2023 and 2024?
BNPL debt: Who is most likely to miss payments?
As Buy Now Pay Later is a relatively new phenomenon even in 2023, there is not much data available yet on how people use these payment solutions. This applies to both user demographics, but also debt. Most domestic surveys observe the target audience is young: Gen Z in the United Kingdom is more likely to use BNPL than older generations, for instance. This is also true for the United States, although older age groups in the U.S. did use BNPL much more often than they did before. This may suggest a use for expensive purchases. Delinquency among U.S. BNPL users remained relatively stable between 2022 and 2023, with nearly one out of four adults seeing their credit score decrease because of missed or late BNPL payments.BNPL in 2024: Klarna to go public?
Klarna has been rumored to aim for an IPO since 2022. These rumors accelerated at the end of 2023. After several quarters without profitability, Klarna recorded its first profit in a while in Q3 2023. Shortly after, shareholder Creades increased the value of its stake in the Swedish BNPL company by about 18 percent, or 11.3 million U.S. dollars. Analysts believed this would mean a valuation of roughly 7.85 billion U.S. dollars, compared to Klarna's latest available valuation. The aim of the IPO is believed to be around 15 billion U.S. dollars, a valuation significantly lower than in 2021. Since that year, the company was affected by interest rate hikes and had to lay off numerous employees. The 2024 IPO is rumored to be in the United Kingdom. BNPL is under regulatory scrutiny in the country. The average monthly BNPL debt of young UK consumers, for example, was over 200 pounds.
