Summary List Placement
Buy now, pay later was a breakout star in the payments world in 2020, with growth fueled by the rapid acceleration of e-commerce.
More than a third of US consumers used a buy now, pay later offering by July 2020, according to Insider Intelligence. It’s the fastest-growing category in payments, projected to more than double its market share in North America from 1.6% in 2020 to 4.5% in 2024, according to Worldpay’s 2021 Global Payments Report.
But as fintechs like Affirm, Afterpay, and Klarna have grown in popularity and valuation, their strategy has shifted from selling to merchants to trying to win consumers as loyal customers of their own.
“They’ve Trojan-horsed a marketing thing in through the finance department,” Brian Barth, the founder and CEO of the travel buy now, pay later player Uplift, told Insider.
Much more than just another payment option, buy now, pay later services have evolved into consumer-facing companies, keen to establish their own brands.
Klarna has a loyalty program of its own, and Affirm recently rebranded in an effort to stand out from competitors and offers its users a high-yield savings account. Afterpay (which also has a loyalty program) was named presenting sponsor of New York Fashion Week, where attendees will be able to purchase outfits they see on the runway directly in the Afterpay app and on its website.
But now, banks and credit-card companies are developing ways to allow merchants to both offer point-of-sale financing and maintain the customer relationships themselves.
Barclays is one such firm, announcing a partnership with the buy now, pay later software company Amount in April that enables merchants to offer installment plans at the point of sale, under their own brands.
Armed with existing credit businesses and balance sheets, banks have the financial resources to manage the …read more