The new report from Hamburg-based market intelligence firm yStats.com, “Global Buy Now Pay Later Market and Trends 2023” offers a comprehensive overview of the new developments in the BNPL market worldwide, provides insights into consumer attitudes towards these services and recent activities of the leading market players. As per the report’s findings, the BNPL market’s growth potential remains high, but with the overall growth lower than predicted previously.
The global BNPL sales are expected to display a declining growth rate post-pandemic
Seamlessly integrated into the checkout process, Buy Now Pay Later (BNPL) services have become the norm in the E-Commerce payments scene, especially with the surge in online channels during the COVID-19 pandemic. According to a projection cited in the yStats.com report, the market size of BNPL could reach close to USD half a billion in five years’ time. While the global BNPL market is forecasted to have a mid-range double-digit CAGR between 2022 and 2027, the annual BNPL market size growth rate is expected to decline after the initial pandemic-driven growth.
Gen Z is leading the adoption of BNPL in the U.S., with older generations showing potential
Recent surveys from major markets, cited in the yStats.com publication, reveal that BNPL services have the highest penetration rates among Gen Z and Millennials, with Gen Z ranking just ahead of Millennials in 2022. In the U.S., nearly two out of three digital buyers who used BNPL in 2022 belonged to Gen Z, and this generation is projected to remain in first place by 2026. Additionally, almost half of online shoppers who are Millennials used BNPL services in 2022. While younger generations currently dominate the BNPL market, the older generations such as Gen X and Baby Boomers are forecasted to experience the most significant growth in BNPL user penetration between 2022 and 2026 compared to Gen Z and Millennials.
Klarna, Afterpay and Affirm remain leading BNPL providers
The top three BNPL providers—Klarna, Afterpay, and Affirm—continue to dominate the market, according to data cited in the yStats.com report. Among these providers, Klarna has the highest number of users, nearly doubling between 2020 and 2022. However, the growth rate of Klarna’s user base significantly declined between 2021 and 2022, with only a few million new users added after the rapid growth experienced during the onset and peak of the pandemic from 2020 to 2021. On the other hand, Afterpay’s user base doubled almost every year between June 2019 and June 2022, though it still has the lowest number of users among the three BNPL providers. As of March 2023, Klarna accounted for nearly half of the global BNPL market, while Klarna, Afterpay, and Affirm combined represented over three-quarters of the total BNPL market, solidifying their continued leadership in the industry.