Buy Now & Pay Later - An Upcoming FinTech Trend?

Ever wanted something so bad, but didn’t have the money to purchase it right then and there? We’ve all been there – our options are to follow traditional banking methods and spend all our savings on it and not look back or we save up for it. However, blockchain technology along with financial technology has now given shoppers the ability to bypass all that with mobile banking and directly purchase what they want with a fintech service known as ‘Buy Now & Pay Later’ (BNPL).

BNPL is a type of short-term financing that gives consumers the ability to make purchases and pay at a future date, mostly interest-free. BNPL Fintech companies are also known as “point of sale installment loans” and is becoming a considerably popular payment option in the past few years both in-store and online.

Using BNPL financing can prove to be convenient for consumers, but like any service, there are also a few downsides and security concerns that need to be considered. The fintech experts #atthelab help uncover what BNPL is all about, what products are supported by BNPL financing, the advantages and disadvantages, and much more.

Who uses BNPL services?

What is the 'Buy Now & Pay Later" concept?

BNPL is an installment loan. Purchases are divided into multiple equal payments, the first of which is due at checkout. Until your purchase has been paid in full, the remaining payments will be billed to your debit or credit card. The BNPL concept has been rolled out targeting the young, cash-strapped millennials who lack credit cards and are new to credit.

PayPal Credit, Affirm, Klarna, Futurepay, and Afterpay are all apps that let you purchase right now and pay later. Many of these apps allow you to pay for your purchase over a series of monthly installments, often with no interest.

For example, you might see BNPL payment options on a $200 purchase that allow you to make four interest-free installments of $50 each if you purchase the item. Once you have received your item, you will pay $50 today, then $50 every two weeks for six more weeks. You could face large late fees and interest charges if you don’t make your payment on time or fail to pay off the balance before the interest-free period ends.

BNPL market

What can you buy?

A wide variety of items can now be purchased through this option, such as clothes, food delivery, groceries, travel booking, and many others. The BNPL facility is now available for shoppers through e-commerce companies, fintech companies, app-based platforms, and even banks.

There are a few characteristics that all buy now pay later plans to have in common, but they are unique to their provider.

Let’s look at how this method is used when buying specific items.

Based on their credit score, repayment tenure, and other factors, banks use BNPL methods to charge interest rates between 10% and 30%. No interest is charged if the loan is repaid on time.

Additionally, many travel websites offer BNPL options during the checkout process. Consumers who prefer to make payments over a fixed period, without high-interest rates, may find point-of-sale loans attractive. With travel restrictions easing you might want to check out how BNPL can help find your next trip…

Is BNPL better than a credit card?

Depending on where and how you shop, both payment methods have their pros and cons. Here’s how you can compare paying with a credit card with buy now, pay later.

By “buying now and paying later” customers can pay in several installments, without a required minimum monthly payment, and avoid any interest charges. However, with BNPL services shoppers aren’t rewarded as much. Benefits such as cashback, miles, or even earning points on the purchase will be scrapped when using a BNPL payment.

It merely depends on the consumer. What would best suit your shopping style?

Is BNPL right for your business?

As a business, you have a choice! Would the customer prefer to work directly with the buy now, pay later providers, or work with their existing payment service provider to implement the payment method. 

Integrating two or more BNPL providers is likely to require a lot of time and effort. A BNPL onramp could be easier and more cost-effective if you work with your existing payment service providers. 

From a merchant’s perspective, BNPL is simply another payment method with front-end integrations that are straightforward. The BNPL provider you choose will also depend on your current payment service provider. Many BNPL providers have a comparably limited geographic scope or are tailored for a specific vertical, so determining the range of options is an important first step. BNPL also differentiate on total transaction costs, making some vendors emerge as more appropriate depending on the weather a merchant is selling at a higher margin or lower margin. 

The number of buy now, pay later options offered by merchants is largely dependent on consumer preferences. Consumers have used BNPL options for so long that they have developed loyalty to one over another. In order for BNPL providers to differentiate their offerings, offering multiple payment options and other value-added services will become more important. 

A few key advantages include to you as a business can include: 

  • A significant drive in sales
  • Build a competitive advantage by improving trust and customer relationships.
  • You get paid in full, immediately in fact, making it a win-win situation for both consumers and businesses. 

Market opportunities for BNPL applications

The Covid-19 pandemic has brought on a wave of change in consumer behavior which has seen consumers migrating online for work, socializing, and even shopping. In Southeast Asia, the accelerated growth in e‑commerce has paved way for the proliferation of alternative payment methods, including Buy Now, Pay Later (BNPL).

Together with the financial uncertainty caused by the pandemic, BNPL has become an appealing payment option for consumers in recent times. The global buy now pays later market size was valued at $90.69 billion in 2020 and is projected to reach $3.98 trillion by 2030, growing at a CAGR of 45.7% from 2021 to 2030.


BNLP provides financial services to traditionally underserved communities. In 2021, the credit card penetration in the Asia-Pacific region was at 13 percent. At that time, the total population in the Asia-Pacific region amounted to approximately 4.29 billion providing a unique opportunity for new fintech apps to gain a foothold in the market.

Why implement a BNPL service?

  1. Convenience – You can apply online and be approved almost instantly and choose a payment frequency that fits your budget (at some BNPL providers).
  2. Affordable & flexible payments for high-value products – For online shops offering exclusive products such as jewelry and electronic devices BNPL can also have a great impact on order conversion. By enabling customers to pay in increments, BNPL schemes have an easier way of selling their products to the market.
  3. Wider audience – By splitting up purchases over 3, 4, 6, or more months, online shops can make big purchases a lot more affordable. By doing so, they can reach a wider audience, including a younger audience.
  4. Improved customer experience – A positive customer experience equates to more sales. Customers are happier when they are given more control over their purchasing decisions. Providing flexible payment systems is one way to empower your customers.

How can ADL assist your FinTech needs?

Axiata Digitial Labs, over time, has developed the capabilities necessary to build FInTech platforms that encapsulate both functionality and design in one place to provide the ideal solution to its clients and end-users in the financial servcies sector. 

Our vision for the sector is to usurp entrenched traditional financial services by being nimbler and helping consumers navigate the congested and often confusing world of finance. 

Here are a few services that our team of FinTech engineers can offer you and your business elevate in the world of digital banking: 

This fintech trend can make it easier to buy things online or in stores and pay them off relatively quickly, often without incurring interest charges. This method is appropriate for people who’ve had trouble getting approved for a traditional credit card, either due to a low credit score or an insufficient credit history.

Choosing the best BNPL package for your business is important to ensure that your online store maximizes the benefits and lessens the risk.

Stay up to date with the latest tech trends and advancements in digital transformation with the ADL tech blog


JOIN #thelab

It’s all happening #atthelab. If you like to be a part of our trailblazing family, tell us about yourself, we’d love to hear from you!




Skip to content