Buy now, pay later (BNPL) services are predicted to experience a significant surge in consumer demand by 2024. These services, which offer micro-credit at the point of sale, are becoming increasingly popular due to their convenience and flexibility. The BNPL sector is expected to reach a market value of $680 billion (£507 billion) by 2025, with an annual growth rate of 13.23% between 2021 and 2028.
The success of BNPL services can be attributed to several factors. Firstly, these services appeal to millennials and Gen Z consumers, who are typically averse to traditional credit cards. Secondly, BNPL services are gaining traction in developing markets, where access to credit is often limited. Finally, the pandemic has accelerated the adoption of BNPL services, as consumers increasingly turn to online shopping.
Despite the growing popularity of BNPL services, there are concerns about the potential risks. These include the possibility of consumers overextending themselves financially and the lack of regulation in the sector. Critics argue that BNPL services can encourage impulsive buying and potentially lead to debt problems. To address these concerns, regulators in several countries are considering introducing rules to protect consumers.
In conclusion, while BNPL services are set to continue their rapid growth, it is crucial to balance this with adequate consumer protections. The future of the BNPL sector will likely be shaped by how effectively it can navigate these challenges.
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