BNPL is a form of credit payment that involves purchasing goods/services and paying for them later. Does it have any impact on businesses in SEA? Could BNPL be the real change in the economy of SEA? Learn more
Covid-19 has brought changes in the world and disrupted the way many industries used to operate. Whether we talk about finance, economics, businesses, politics, or public health and safety, we are seeing new trends in every sector. The pandemic has forced the population of Southeast Asia to adapt to the latest trends.
From macroeconomics to individual consumer spending, there have been major changes and newer methods. BNPL is also becoming a popular payment method, especially due to the pandemic. Let’s learn how “Buy Now Pay Later” (BNPL) is impacting the businesses in Southeast Asia (SEA).
BNPL allows consumers to purchase their desired goods with the ease of paying at a later date. Later payments may allow bi-weekly, weekly, or even monthly installments, which are usually interest free. For such reasons, eCommerce players, including Razer, Grab, Oriente, and others are trying to cater to the market demand for BNPL services.
While consumer spending has increased substantially, Indonesia, Malaysia, and Singapore are at the forefront of this rise in eCommerce market value, and BNPL is becoming popular. Some experts believe that due to the increase in internet usage, BNPL market is seeing a massive boom. They predict that the market may hit the US$ 33 billion mark by 2027!
A Singapore-based BNPL solution provider, Hoolah, has recorded an increase in revenues and profits with the surge in BNPL eCommerce market demands. More importantly, they are seeing a massive increase in the online transaction volume throughout Singapore and other regions of SEA.
What’s more interesting is that Hoolah is not the only player with game-changing plans that incorporate BNPL strategies. Companies like Razer Fintech, Grab, and Oriente are also adopting the idea of having more BNPL-related solutions to cater to the growing needs of the Southeast Asian eCommerce markets.
Current generation of shoppers is demanding more time. They have been in the search of new ways to pay for goods and services. In fact, most of the SEA consumers suggest there should be more than a handful of payment options for given goods and services.
Therefore, companies like Bread, Affirm, and PayPal are addressing the rapid rise in demand for the BNPL paying method. These companies purchase goods from suppliers and provide the consumers, who then pay their dues on timely agreements. While it is risky, it is helping businesses and consumer markets grow in SEA.
Reports show what effect the latest developments from financial companies like Mastercard will have on the eCommerce market of SEA. With maximum flexibility and zero-interest rates on purchases, there is sure to be a drastic improvement in online sales throughout SEA.As consumers find it easy to pay for their purchases in feasible installments, it is valid to assume the BNPL trend will become more common.
Consumer behaviour changes with the social, economic, and financial developments. SEA’s eCommerce market size was US$62 billion in 2020. What’s more? It is likely to reach US$170 billion by 2025. The recent changes in the eCommerce services coupled with the benefits and convenience of BNPL can provide more opportunities for growth to the players in the eCommerce market.