Analyzing the rise of ‘Buy Now, Pay Later’ services

Phil Siarri
4 min readNov 24, 2020
Image by OpenClipart-Vectors from Pixabay

By now you might be familiar with the term “Buy Now, Pay Later” (commonly referred to as “BNPL”). Let’s explore some of the reasons for this trend.

So what is BNPL exactly?

“Buy Now, Pay Later” schemes are loan financing products which are somewhat similar to credit cards. Through partnerships with specific retailers, you can buy goods and services through installments (with APRs similar to mainstream credit cards / lines). These typically range from four bi-weekly payments to installments spread over 60 months.

It’s a fairly streamlined process: you don’t need to pull any physical “plastic”, enter your number, etc… Besides the convenience factor, most providers will only perform a “soft credit check” every time you make a purchase. Some retailers also run special offers such as 0% interest options if you pay the full balance within a relatively short period of time. This type of loan can be potentially interesting for consumers who either lack a conventional credit history or are not particularly interested in managing credit cards.

BNPL has been around for decades (I vividly remember my parents buying home appliances and electronics in the 80s and 90s through such means). As of July 2020, one third of U.S. consumers have used some form of BNPL service. Yet the expansion of ecommerce has accelerated the proliferation of new digital providers. Think of it more as a continuation or adaptation rather than a full-blown disruption.

The new kids on the block

While there are many new entrants on the market, four companies come to mind.

Klarna (which means “clear” in Swedish) was founded in 2005 in Stockholm. Overtime the company has grown tremendously, now serving 17 countries including the U.S. and U.K. I’m including more stats below (pulled from their official website at the time of writing):

.Total end-customers: 90 000 000

. Total number of merchants: 200 000

. Number of transactions per day: 1 000 000

. Number of employees: 3 500

Klarna is known for cultivating an offbeat, youthful image. Their commercials are always……

Phil Siarri

Founder of Nuadox | Tech & Innovation Commentator | Digital Strategist | MTL | More about me>