GlobalData: Buy Now, Pay Later to disrupt consumer payments in Australia

Company officials stated that COVID-19 has adversely affected the consumers’ disposable income, creating a demand for short-term consumer financing. The increasing demand for credit coupled with growing consumer preference for ecommerce has made the BNPL service as one of the preferred short-term borrowing tools among the consumers.

According to GlobalData’s 2021 Financial Services Consumer Survey conducted online in Q1-Q2 2021, 36% respondents in Australia indicated using BNPL in the period. This payment model has gained traction in Australia with payments and fintech companies looking to get a slice of this market. Afterpay is one of the BNPL brands in Australia, with global sales of USD 21.1 billion during the year ended 30 June 2021, registering a YoY growth of 90%.

While the Australian BNPL market is occupied by providers such as Afterpay, Zip, and Openpay, new players are entering the market. In July 2021, PayPal joined the list by launching its ‘Pay in 4’ service in Australia, which allows customers to pay for purchases in four instalments. 

GlobalData concludes that with the country recovering from COVID-19 pandemic, BNPL presents increased potential in Australia. Rising consumer spending, high consumer preference for electronic payments, and proliferation of BNPL providers will support growth of BNPL business model.