Market Overview:
Buy now pay later platforms have enabled consumers to purchase goods and pay for them later through easy monthly instalments rather than paying the full amount upfront. These platforms provide a more affordable and flexible payment option especially for big-ticket items. They have proliferated e-commerce sales by providing customers the means to better manage cash flows and budget expenses. The model benefits both consumers and merchants.
Market Dynamics:
The Mena And Cis buy now pay later platform market is projected for robust growth owing to rising e-commerce sales in the region and initiatives to increase financial inclusion across developing nations. According to the United Nations Conference on Trade and Development, e-commerce sales in the Middle East and North Africa reached $26 billion in 2019 indicating immense untapped potential. Additionally, as per Economist Intelligence Unit, credit card penetration in the Middle East is amongst the lowest globally at 10%. Buy now pay later schemes help address the credit gap by offering convenient credit lines to more consumers. They empower customers with responsible spending power and flexibility to pay later over time which further fuels retail spending especially for luxury items. The payment flexibility coupled with increasing internet usage on mobile devices is anticipated to significantly contribute to the regional BNPL market growth over the forecast period.
Segment Analysis
The Mena And Cis Buy Now Pay Later Platform Market can be segmented into the service type and application. Based on service type, deferred payment dominates the segment as it enables customers to pay for purchases in interest-free installments over a period of time. Consumers prefer deferred payment as it allows flexible repayment options without charging late fees.
PEST Analysis
Political: The regulations around the BNPL industry in MENA and CIS region are evolving. Some countries have introduced stricter rules around late payment fees and credit checks to protect consumers.
Economic: The rising internet and smartphone penetration along with growing e-commerce industry is propelling the adoption of BNPL platforms in the region. The young population is driving consumption.
Social: Changing consumer preferences towards instant purchases and online shopping are increasing the popularity of BNPL services. Consumers find it convenient to split payments for purchases.
Technological: Advancements in payment gateway technologies are making digital payment options more secure and convenient. Emergence of open banking is allowing BNPL providers to integrate with banks seamlessly.
Key Takeaways
The Mena And Cis Buy Now Pay Later Platform market size was valued at US$ 1152.6 Mn in 2021 and is expected to witness high growth, exhibiting a CAGR of 8.2% over the forecast period. The growth is attributed to the increasing adoption of digital payment modes and rising online shopping among consumers in the region.
Geographically, the MENA region dominated the market in 2021 due to the booming e-commerce industry and high smartphone penetration in countries like Saudi Arabia and UAE. However, CIS countries are expected to be the fastest growing segment owing to the expansion of leading BNPL players and developing digital payment infrastructure in Russia.
Key players operating in the Mena And Cis Buy Now Pay Later Platform are Afterpay, Holdings Inc., Klarna Bank AB, Laybuy Group Holdings Limited, Payl8r (Social Money Ltd.), PayPal Holdings Inc., Perpay, Quadpay. All the major BNPL providers are focusing on strategic partnerships and collaborations with local banks and merchants to expand their share in the high potential region.
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