Buy Now, Pay Later (BNPL for short) is a type of financing that allows consumers to make purchases and pay for them later in the foreseeable future. These BNPL apps divide your total purchase into equal instalments, with the first due at checkout. They are similar to credit cards because they allow you to buy something today then pay for it. The most significant difference is that many BNPL apps do not charge any interest as long as you make the scheduled payments. These eCommerce payment solutions platforms for merchants and shoppers give customers the freedom to choose how and when to pay.
According to Allied Market Research, the global buy now pay later market size was valued at $90.69B (£68.65B) in 2020 and is projected to reach $3.98T (£3T) by 2030, growing at a CAGR of 45.7% from 2021 to 2030. Mainly, it exploded in popularity during the pandemic.
The payment system is rapidly changing and evolving, and more people shifted to online shopping. As a result, many retailers have partnered with buy now, pay later apps because BNPL helps make it simpler for people to make acquisitions on their websites. According to BBC news, over 17 million customers in the UK have used a buy BNPL company to purchase goods online, company data shows.
In this post, we’ve gathered together top rising ‘Buy Now, Pay Later’ companies in the UK. We hope you can find the list helpful.
The BNPL apps are user friendly, have low fees, interest rates, and credit limits that allow for common purchases. To help readers find the best BNPL apps, we’ve compiled some popular BNPL services to determine which ones work best for various consumers.
Top Rising ‘Buy Now, Pay Later’ Companies List
Klarna was founded in 2005 in Stockholm by Sebastian Siemiatkowski and aims to simplify the online shopping experience. In the last 17 years, technology has evolved and transformed the world around us, yet their objective remains as pertinent as ever to make paying as simple, safe, and smooth as it can be.
Klarna is one of the leading global payments and shopping services, providing intelligent and flexible shopping and purchase experiences to 147 million active consumers across over 400,000 partners in 45 countries.
Klarna has raised $3.7B (£2.8B) in funding over 34 rounds. Their latest funding was on December 10, 2021. They’re valued at over $45.6B (£34.5) and growing by more than 40% a year; they work with more than 250,000 merchants in 17 core markets.
Laybuy is a technology-driven payments business that makes desirable and affordable payments. It is an innovative, fully integrated payment platform designed with simplicity at its core.
Laybuy’s mission is to revolutionize how we spend across all market sectors and provide a tailored solution to your business needs.
Laybuy was founded by Alex Rohloff, Gary Rohlof and Robyn Rohloff in 2016. Laybuy has raised $130.9M (approximately £99M) in funding over 2 rounds. Their latest funding was on May 19, 2021. The app helps consumers to experience fee freedom when they pay on time.
Clearpay is fully integrated with all your favourite stores. So shop as usual, then choose Clearpay as your payment method at checkout.
Clearpay/Afterpay claims they’re on a mission to power an economy where everybody wins.
ClearPay, funded by Afterpay, is an optional payment method for the things you love with three equal interest-free payments. The startup has raised £84.6M in funding over 1 round on December 21, 2021.
DivideBuy provides a quick application process with an instant decision, meaning that customers can spread the cost of their purchases with no hidden charges. In addition, offering an alternative payment method to your customers can benefit from increased average basket values and reduced basket abandonment.
DivideBuy allows users to split the payment of their purchases into equal chunks throughout a specified period. A payment term can be between two and 12 months. The recurring card payments are collected monthly until your balance is paid – plus, customers can manage your account online and make additional payments; DivideBuy puts you in control.
DivideBuy has raised $493.5M in funding over 3 rounds, and their latest funding round was on September 9, 2021. The company is funded by 3 investors so far, the most recent being Davidson Kempner and Davidson Kempner.
The global BNPL industry is rising. They mainly utilize innovative technologies to offer consumers the shopping experience they deserve with the new and improved apps.
Jeff Tijssen, partner at Bain & Company, said, “BNPL benefits both consumers and merchants and has a clear role in the UK financial services market.”
Soon, we will introduce you to more BNPL apps, it’s a growing sector, and they will be available on iOS and Android. These apps are helping customers. Additionally, many UK fintech firms will launch their own buy now, pay later services because it’s a profitable business.
A recent survey for Citizens Advice found that almost one in 10 people planned to use BNPL to help with Christmas shopping.
Among the other findings of BNPL research and consumer survey shows that 49% of online shoppers aged 25-34 surveyed in the UK reported using BNPL, and 51% used credit cards; the generational shift toward BNPL is even more apparent among younger individuals. For example, among respondents aged 18-24, more used BNPL (42%) than credit cards (31%).
Kate Hobson from Citizens Advice urged consumers “not to spend more than they can afford.”
BNPL players will keep making money from customers. Their revenue model is based on their spending. They usually charge an interest ranging between 10% and 30% based on customers’ credit score, repayment tenure, etc. There will be no charge if the amount is repaid on time. But, think about yourself? They know your cognitive bias, so you can promise yourself to set a specific limit on your purchases, but massive data says the opposite. The capitalist system will force consumers to buy more than they need (+afford) every time, and you will do too, unconsciously.
So, think how lucky these companies are! Most people don’t understand what they sign up for.