How technology will play a crucial role in the success of BNPL providers?

It's no longer unusual to make a purchase now and make payments at a later date suntell. In recent years, a plethora of "Buy Now, Pay Later" (BNPL) services have entered the market, including PayPal Makers of the Square, Afterpay, Klarna, Affirm, and many more. Lending at the point of sale, also known as BNPL, has seen rapid expansion due to factors such as the proliferation of e-commerce platforms and related services, digitalization, increased merchant adoption of BNPL, and rising repeat usage among younger customers.

The global BNPL market is projected to grow from USD 22.86 billion in 2022 to USD 90.51 billion in 2029 at a CAGR of 21.7%.

Despite growing prices and interest rates, most BNPL providers reported an increase in active users at the start of this year. A recent poll indicated that over half of American customers had utilized a purchase now, pay later service, and that figure is rising. BNPL providers are partnering with Shopify, WooCommerce, BigCommerce, and others to meet growing demand for delayed payments for online purchases and adult spending.

How Technology will decide your success in BNPL?

Modern shopping involves BNPL. Startups aiming to launch a new BNPL service and BNPL FinTechs looking to develop must recognize technology's importance. 67% of BNPL consumers think the service might replace their credit cards owing to its ease. As money flows from major, established financial institutions to newer FinTech enterprises suntell, regulators and government authorities have demonstrated growing interest in the BNPL to safeguard clients and preserve order during the economic crisis. Technology can help you assess your BNPL performance:

Real-time Analysis:

BNPL providers can use online and real-time data to verify buyers' identities and affordability risks using government databases. These sophisticated technologies enable BNPL FinTechs to execute real-time ID verification, KYC, AML, credit history, and affordability checks to streamline digital lending and payments.

BNPL and Retailer Systems Integration:

Retailers have discovered that having online and in-store BNPL payment alternatives helps upsell consumers, boost conversion rates and basket sizes, and meet business goals quickly. The retailer and BNPL provider must simplify consumer sign-up and one-click checkouts to offer a viable BNPL payment option. Regulated BNPL FinTechs can quickly and seamlessly integrate with merchants' eCommerce platforms to improve customer experience using modern technology.

Automated Payment Processing:

BNPL FinTechs can automate payments with modern technology. Most BNPL FinTechs interface with current payment processing systems, which lowers their margins. Automated payment processing boosts income, trustworthiness, and user data security.

Full BNPL Lifecycle Automation:

BNPL FinTechs can use advanced technologies to automate the full BNPL customer lifecycle, including transaction approvals, automated repayment reminders, interest and fee calculations, reconciliations, debt collection processes, failed and penalty payments, credit line management, allocation of payments and repayments, and more. BNPL FinTechs will save on back office operations staff costs.

Top and Unique BNPL Business Models in the Industry

Banks have traditionally offered POS financing, but they haven't upgraded their technology to provide a better consumer experience. McKinsey found that 60% of customers will utilize POS financing in the following year. Diverse vendors and models with different objectives and value propositions are driving the adoption of BNPL technology. We highlighted a few BNPL business models to assist you understand this market and how POS finance providers are targeting the ecosystem to suit merchant and customer demands.