Swipe now, pay later: Poised for 7.7% of e-commerce payments by 2028 in Asia-Pacific

By Our Reporter
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Buy now pay later (BNPL) services are reshaping the way consumers engage with e-commerce in the Asia-Pacific (APAC) region. According to a recent analysis by GlobalData, a leader in data and analytics, these flexible payment options are set to capture 7.7% of the e-commerce payment market by 2028. This projection underscores the growing inclination towards short-term credit and a robust online shopping culture.

As of now, Australia and New Zealand are leading the charge, where the integration of BNPL in online transactions is most pronounced. For instance, in 2023, about 21.5% of Australia’s e-commerce payments were processed using BNPL schemes, while New Zealand reported a rate of 11.9%. Other countries in the region, including Singapore, India, Indonesia, and Japan, are also adopting this trend at a rapid pace, reflecting a broader acceptance across APAC.

The appeal of BNPL platforms is particularly strong in markets like India, where traditional credit facilities such as credit cards have limited penetration. From a negligible 0.1% in 2019, India’s BNPL market share has skyrocketed to an estimated 5.8% in 2023. This growth is bolstered by the burgeoning e-commerce sector, with major online retailers like Flipkart and Amazon offering their own versions of pay-later services that allow customers to spread the cost of purchases over several months.

Shivani Gupta, Senior Banking and Payments Analyst at GlobalData, noted the dynamic competitive landscape in the BNPL sector. “The region has seen a surge in the number of payments and fintech companies vying for market share. This competition, along with high consumer awareness and the increasing demand for flexible financial solutions, especially among millennials, is driving the popularity of BNPL services.”

However, the rapid ascent of BNPL is not without its challenges. There is growing concern that such facilities might encourage impulse buying, leading to potential over-indebtedness among consumers. In response, regulators across APAC are stepping in to ensure consumer protection. New Zealand, for example, is set to bring BNPL under the regulatory framework of the ‘Credit Contracts and Consumer Finance Act 2003’, a move that will see BNPL providers held to the same standards as traditional credit institutions starting from September 2024.

This regulatory push underscores a commitment to safeguarding consumer interests while supporting informed financial decisions. Under the new regulations, BNPL providers will be required to offer more transparency and assistance to consumers, ensuring protections against unreasonable fees and offering compensations for any regulatory breaches.

Despite these concerns, the potential for BNPL in APAC remains significant. The shift towards online shopping and the increasing acceptance of BNPL options by e-commerce merchants are likely to further fuel its adoption. As Gupta suggests, the combination of a young, tech-savvy population and governmental initiatives aimed at boosting consumer confidence could significantly propel the growth of BNPL services across the region. This shift represents not just a change in how payments are processed, but also in how consumers approach financial management and spending in a digital age.


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