BNPL companies & the continental divide


This article is brought to you by Retail Technology Review: BNPL companies & the continental divide.

By Jeff Knowles, freelance writer.

Within the past few years, buy now, pay later (BNPL) has revolutionised the payments landscape on every continent—most impressively during the COVID-19 global shutdown. With BNPL services first appearing in the 2010s as a solution to financing pain points like complex user experience and credit cards with high APRs and fees, they took a profound leap forward in the 2020s. GlobalData revealed that the total transaction value for BNPL payments worldwide went up from $33 billion in 2019 to $120 billion in 2021, with everyone from investors and merchants to consumers ready to buy in.

BNPL business models and market approach, however, largely depend on which side of the world you look at. To get up to speed with what the future holds, FinTech experts worldwide dig into two booming digital payments markets—Europe and Asia—and why custom BNPL development is essential for their region-specific success.

European and Asian BNPL services: 3 key differences

No matter what country your BNPL firm is based, it’s vital for all FinTech players to better understand regional trends – near and far – and strategically get out in front of them. Looking at BNPL in Europe and Asia highlights some important universal topics. According to Star’s digital finance experts, here’s where to focus your attention:

  • Traditional vs. emerging markets. Asia makes up over half of the world’s population while Europe makes up less than ten percent. This highlights why Asia, as a whole, is a highly attractive consumer market for any industry, including BNPL. In addition to population, the biggest difference can be seen in economic structures: Europe includes a larger banking population and more traditional institutions that are part of the global finance system; conversely, many Asian economies are quicking emerging as part of today’s digital economy with consumers that are digitally-savvy but lack access to traditional banks, credit cards and credit ratings. For BNPL app development, this means less competition with traditional players across Asia and an easier onboarding process with new customers. In Europe, the key is learning to partner with or capitalize on those traditional structures to bring your cutting-edge BNPL product to more users.
  • Micro vs. macro partnership models. One of the biggest regional differences is how BNPLs approach retailers. In Europe, many of the biggest firms like Klarna and Affirm have direct partnerships with a huge number of individual merchants. In Asia, BNPL companies focus on partnerships with broader B2C ecommerce platforms including Singapore-based Shopee and Zalora to gain access to more consumers. Exploring further BNPL trends helps paint a picture of how the consumer-centric model brings about different results on different continents.
  • Global giants vs. homegrown BNPL. Industry shake-ups are expected in every market. That’s why no one could ignore the quick emergence of Apple Pay Later, its version of BNPL, which is poised to do particularly well across Europe. While well-resourced giants including big tech, traditional banks and global credit-card companies have an easier time entering European markets, the same can’t be said across Asia. Localized BNPLs acquire customers that others can’t, and one case study that highlights this power of regional BNPL app development is Paidy, Japan’s top BNPL firm. This island nation is a famously difficult market to enter, and Paidy customized the optimal digital product to gain a competitive advantage over other FinTech players, no matter how big or small.

Pioneering BNPL app development for localized markets

Whether you’re looking to launch cutting-edge BNPL or other digital payments, the essential piece of the puzzle is starting with both a consumer-centric and region-specific approach. One of the best ways to accomplish this is through end-to-end financial services consulting. These offerings focus on a variety of products – from FinTech builders and AI applications to blockchain and IoT – and provide that pivotal step to plan ahead for thriving in the digital ecosystem.

Best of all, the cross-industry experts at Star specialize in this collaborative approach, and are ready to take steps now in delivering your next product innovation.

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