Is BNPL a Boon or Bane for Payment Sector?

CIO Review APAC | Tuesday, May 17, 2022

The payment sector is being shaped by the ever-increasing desire for variety, value, and flexibility. To accommodate this need, the industry is fast inventing a slew of new technologies.

Fremont, CA: Consumers now have a growing variety of options for spending money quickly and easily. And, in the fast-paced world of payments technology, innovation is never far away.  The payment sector is being shaped by the ever-increasing desire for variety, value, and flexibility. To accommodate this need, the industry is inventing new technologies, and these three—pay now pay later, pay by the phone, or pay in instalments—standing out. 

1. Buy Now Pay Later (BNPL): Giving Consumers Control over Cash Flow

Over the last few years, the 'buy now, pay later model has grabbed the world by storm. Spreading globally and growing ravenous popularity, they have made their impact on the consumers' checkout experience by introducing a new category and forever changing the way people pay. And, wonder of wonders, the current generation of BNPL models allows customers to spread out costs while still getting everything they want when they want it – often with zero interest. Some well-known BNPL providers are expanding their offerings beyond payments, and merchants continue to use BNPL at the checkout. According to Juniper Research, global spending on BNPL services will nearly quadruple by 2026, nearly quadrupling the current number. Simultaneously, fintech firms, huge IT organizations, card providers, and online banks are all providing BNPL solutions to get a piece of the pie.

2. Buy More, Pay Less: Reduce Cash Flow and Earn More Points

Long gone are the days when consumers' hard-earned points converted into a two-dollar lipstick tester sample. When combined with the correct cutting-edge payment mechanism, reward points can now pack a lot more of a punch. Businesses can use developing BNPL technology to either free up shoppers' points so they can buy more and pay less for their purchases – or to allow consumers to earn points on their purchases, allowing them to fill up their points balance as they spend. Meanwhile, the merchant wins by increasing the average basket value and obtaining a larger portion of what customers are prepared to pay. This adaptable new technology can make consumers' hard-earned money go a lot further by allowing them to tap into different purses of rewards points.

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