Buy now, pay later is spreading across different industries
The buy now, pay later (BNPL) payment option was first introduced into the fashion and beauty category. However, it started to foray into different sectors, starting from consumer-packaged goods to financial products in the last couple of years due to the strong demand for easy access to credit. Moreover, the pandemic accelerated the adoption rate of this deferred payment model across the world. According to PayNXT360’s Q3 2021 Global BNPL Survey, adopting the deferred payment option is to spread across different industries in short to medium-term perspectives.
Inclusion of BNPL is going to increase in the foodservice industry
During the last four to six quarters, demand for the BNPL payment option in the foodservice industry increased significantly. Many restaurants and pubs have partnered with BNPL providers to attract customers during the ongoing pandemic. For instance,
- In November 2021, the pub chain Australian Venue Co (AVC) has partnered with BNPL player, Afterpay to introduce the 'Dine Now, Pay Later' option in 160 venues. Notably, this option will also be included in very popular establishments such as The Imperial Hotel and College Lawn in Melbourne, Winery and Bungalow 8 in Sydney, and The Aviary and Sweetwater Rooftop in Perth.
- The company took this decision after Australia had emerged from a series of lockdowns and reached an 80% double vaccination rate. This allowed for the dining and hospitality sector to restart their business after almost two years, and AVC grabbed the opportunity to attract customers via the BNPL option.
BNPL adoption in subscription-based services are growing
Subscriptions are very common in terms of newspapers and magazines; however, recently, streaming apps such as Spotify and Netflix boosted the subscription-based businesses during the pandemic. The growth of subscription-based businesses attracted BNPL players to expand their consumer base. For instance,
- In November 2021, Afterpay introduced its subscription solution for United States consumers, allowing them to pay for their favorite recurring purchases in installments. The subscription offering has attracted merchant partners, such as gym memberships, entertainment subscriptions, online services, and more. Many lifestyle brands such as IPSY, BoxyCharm, Savage X Fenty, and Fabletics will be amongst the merchants to offer Afterpay's subscription payments from early next year.
- Moreover, the BNPL player is allowing merchants to ensure an efficient checkout and auto-renewal process of subscriptions for the consumers. The company has already attracted consumers via a 4-installment plan. Notably, this subscription plan will help the merchants to capture more consumers, which will improve the customer base of the company in total.
- Subscription solution will be available in the United States and Australia by early 2022. Also, the company plans to extend this feature in-store and to other regions, including Canada, New Zealand, the United Kingdom, and Europe.
Demand for BNPL in motor insurance is to rise
BNPL space is witnessing a surge of partnerships for integrating motor insurance policies in the last four to six quarters. For instance,
- In November 2021, South-Asia-based BNPL provider, Atome, has partnered up with a local insurance provider, Bjak, to launch a BNPL payment option for car and motorcycle insurance purchases. The plan includes that both car and motorcycle owners will be able to split insurance payments into three equal payments with zero interest rate.
- Notably, the insurance platform, which was launched in 2019, has grown its online insurance penetration by 10% for both car and motorcycle insurance. So, the partnership will help the company to ease the insurance renewal for the customers post-pandemic. This strategy of the company will attract more customers, thereby increasing its market share in the long run.