With relatively low financial inclusion and an even lower credit card penetration, buy now pay later has emerged as a preferred payment solution for many Southeast Asian consumers over the last two years. The BNPL adoption, driven by the global pandemic outbreak, has continued to grow at an accelerated pace. As a result, many of the leading internet companies in the Southeast Asian markets have entered the space to boost their revenue growth. Grab Holdings, Sea Ltd., and GoTo Group, are all providing their users with a BNPL payment solution to be used across different products and services.
Despite the economic challenges faced by BNPL providers globally, the payment method has continued to gain widespread adoption among consumers. With inflationary pressures and the subsequent surge in the cost of living having a severe impact on the monthly budget for many, BNPL has again gained rapid momentum in Southeast Asia. Amid the growing popularity and demand for flexible payment solutions, providers are forging strategic alliances to bring the payment method to more merchants and consumers in the region.
Many of the payment firms in the region have been seen forging strategic alliances with BNPL providers in Southeast Asia. This trend is projected to further continue as BNPL firms seek to expand their merchant network, thereby providing consumers with their preferred payment type at more merchants.
Unlike other BNPL solutions, Pine Labs works with partner banks enabling cardholders to make installment-based purchases without the need of downloading any mobile applications or subscribing to any mobile wallets. In collaboration with 2C2P, Pine Labs will enable customers to use the BNPL method at all of 2C2P's merchant partners in the six key Southeast Asian markets, thereby supporting the growth of the BNPL gross merchandise value and volume.
In the Philippines, BNPL providers and digital banking firms are also entering into strategic collaborations to further accelerate BNPL gross merchandise value and volume, by onboarding more customers on the BNPL platform. For instance,
All of these strategic collaborations to enable more merchants to offer BNPL payment options and to onboard more customers to a specific service has resulted in a fast-growing BNPL ecosystem in Southeast Asia. PayNXT360 expects the trend to further continue across the region, as demand for BNPL is projected to remain strong, among both customers as well as merchants from the short to medium-term perspective. The growing competitive landscape is also projected to drive venture capital and private equity funding in the Southeast Asian market over the next three to four years.
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