- March 05, 2021
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Buy Now Pay Later – the hottest vertical in FinTech space Buy Now Pay Later (BNPL), point of sale loans that allow consumers to fund their purchase by installment payments, gained tremendous momentum in 2020. BNPL company Affirm has listed its shares at US$49 on Nasdaq, and the share price rocketed by 98% on the first day, lifting its market value to US$23.6bn. The company just completed a US$500mn Series G round in Sept 2020 with a valuation of around US$5bn. Australian BNPL pioneer Afterpay’s stock price has surged 12x since the beginning of the pandemic. Swedish Klarna’s valuation tripled in 6 months to US$31bn after the US$1bn venture funding round in March 2021 and became the largest FinTech unicorn in Europe. FinTech giants and traditional financial institutions are actively joining the race; these include PayPal, Mastercard, Chase, Fiserv, Razer, etc. BNPL services gained popularity during Covid-19: from online to offline, from young people to older generation Increasing ubiquity of BNPL services amid pandemic. With Covid-19 placing more financial pressure and banks reining in credit to control risks, BNPL services gained tractions for its easy, instant, and pure online experience. Pymnts’ November survey showed that 48% of BNPL users would not purchase without the BNPL option. Afterpay’s global underlying sales surged from AUD2.6bn in 1Q20 to AUD 4.1bn in 3Q20, and its number of annual active customers doubled from 5.1mn in 1Q20 to 11.2mn in 3Q20. |
