In this article, we discuss the 11 biggest BNPL companies in the world. If you want to read about some more BNPL companies, go directly to 5 Biggest BNPL Companies In The World.
Digital payment options have gained immense popularity in recent years. These payment options are more popular in Europe and US, but are gaining prominence in Asia, Australia and New Zealand as well. With the rise of digital payments, there has also been a marked increase in the use of Buy Now, Pay Later (BNPL) applications. Buy Now, Pay Later is basically short-term financing that allows consumers to make purchases and pay for them later through interest free installments.
Many BNPL companies have emerged over the years, offering digital payment services to customers and merchants around the world. The BNPL companies charge retailers a fee, which is between 3% and 6% of BNPL sales, and this cost is likely to be passed onto consumers. BNPL apps are the latest financial tools which make it easier for customers to access credit for the products they have bought. These apps integrate with retail stores, allowing the customers to carry on shopping activities conveniently and settle the bill offsite with deferred methods.
Some of the top firms in this space include Visa Inc. (NYSE:V), Block, Inc. (NYSE:SQ), and PayPal Holdings, Inc. (NASDAQ:PYPL), among others discussed in detail below. The global BNPL market size is expected to expand up to $20.40 billion by 2028. It is important to note that since the global pandemic struck, the buying patterns of customers have changed drastically. It is also noteworthy that almost 75% of BNPL users are Generation Z or millennials, and they are more cautious about credit in times of financial crisis.
The global BNPL market was valued at $15.91 billion in 2021. The market is projected to grow from $22.86 billion in 2022 to $90.51 billion by 2029, exhibiting a compound annual growth rate of 21.7% during the forecast period of 2022 to 2029. The global BNPL market exhibited a higher growth of 48.3% in 2020 due to the global pandemic. The US tops the BNPL market. According to recent research, BNPL users in the country have increased by 300% since 2018, with 45 million users in 2021.
The leading players in BNPL are offering various services for categories such as travel and tourism, online shopping, consumer electronics, retail, healthcare insurances, banking and financial services. Further, several e-commerce companies across retail, banking and healthcare insurance are adopting this service to facilitate customers around the globe.
With these dynamic changes worldwide, the online shopping and digital payments segment has gained immense significance, leading towards increased demand for BNPL services all around the world. Today, millions of shoppers use BNPL services, evidenced by the 215% year-over-year growth for the industry in the first two months of 2021. Further, it has been forecasted that around 1.5 billion consumers around the world will spend $995 billion through BNPL by year 2026.
These were picked from a careful assessment of the BNPL industry. The details of each BNPL company are mentioned alongside a discussion around top firms in the sector in order to provide readers with some context for their investment decisions. To see our article about the top BNPL companies in the US, please click the link.
Biggest BNPL Companies In The World
11. Hoolah/ShopBack PayLater
Estimated Valuation: Private
The company, founded in 2018, is a Singapore-based fintech company, and one of the leading BNPL companies in the world. The company operates a 1,500-strong merchant network in Singapore, Malaysia and Hong Kong. The company entered the Malaysian market in 2019 and since then has partnered with both local and global merchants. The digital platform allows customers to buy now and pay later through three interest-free monthly payments. In 2020, the company expanded its BNPL option for in-store solutions for customers as well. The company focuses on customer engagement, employee engagement and a merchant network, a trio that has helped in achieving rapid growth in recent years.
ShopBack acquired Hoolah in late 2021 and has since rebranded its BNPL service to ShopBack PayLater.
10. Openpay Group Ltd (ASX:OPY.AX)
Market Capitalization: $30 Million
Openpay Group Ltd (ASX:OPY.AX), an Australia-based fintech company, operates in the BNPL industry and offers online financial services. The company allows customers to pay for products using interest free installments. The company is a fast-growing global player in the BNPL markets with a strong digital platform which offers flexible, convenient and transparent plans for customers and merchants in several global markets. Openpay Group Ltd (ASX:OPY.AX) has footprints in Australia, New Zealand, UK and the US, where it operates under the brand name Opy. The company’s digital payment app works through the model of purchase today, pay it your way by choosing to make weekly or fortnightly payments.
9. Zip Co Limited (ASX:ZIP.AX)
Market Capitalization: $289 Million
Zip Co Limited (ASX:ZIP.AX), founded in 2013, is an Australia-based public limited financial technology company. The company has reported a revenue of $620 million with 11.4 million customers in 2022. The company is a global leader in providing digital retail finance and payments. The company aims to offer innovative, responsible and fair payment products for not only businesses and SMEs but also consumers to manage their finances. Zip Co Limited (ASX:ZIP.AX) is one of the biggest BNPL companies in the world with footprints across 12 markets and a focus on four strategies centered around payment acceptance, app engagement, and global expansion and zip business.
Estimated Valuation: $2 Billion
LatitudePay is a venture of Latitude, which is one of the biggest digital payments, installments and lending companies in the world. The firm aims to help businesses grow and people manage their finances. Latitude serves over 2.6 million customers, mainly in Australia and New Zealand, with financial services. The company has 1,950 merchant partners which operate in more than 9,000 online and physical outlets in the two countries. The company offers digital payment and BNPL services to customers in Australia, New Zealand, Canada, Malaysia and Singapore. LatitudePay is a consumer financing platform that provides facilitation for businesses of all sizes for giving installment plans directly to their customers.
Estimated Valuation: $4 Billion
Monzo Bank Ltd, founded in 2015, is an online UK-based bank which is known as the earliest app-based challenger banks with a mobile app called Monzo. Monzo is often referred to as a unicorn in the banking industry. Monzo is reported to have 5.8 million users and a clear growth path ahead. The company is expected to become profitable in 2023 as the customer base is increasing by 100,000 every month. The company earns revenue through a process called interfacing which takes 0.2% for every debit card transaction. The company has partnered with OakNorth, Paragon and Charter Savings to facilitate savings through mobile apps.
6. Affirm Holdings, Inc. (NASDAQ:AFRM)
Market Capitalization: $3 Billion
Affirm Holdings, Inc. (NASDAQ:AFRM) operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. Founded in 2012, it has become one of the largest BNPL companies in the world. In 2019, the company entered into a partnership with Walmart to provide a digital payment facility to customers both in-store and on Walmart's website. The company has expanded its operations through acquisitions and mergers, such as in 2021, a financial technology service company, Returnly, was acquired for $300 million. Affirm will be Amazon’s BNPL partner in the US from January 2023.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Affirm Holdings, Inc. (NASDAQ:AFRM) with 4.1 million shares worth more than $77 million.
Just like Visa Inc. (NYSE:V), Block, Inc. (NYSE:SQ), and PayPal Holdings, Inc. (NASDAQ:PYPL), Affirm Holdings, Inc. (NASDAQ:AFRM) is one of the biggest BNPL companies in the world.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Affirm Holdings, Inc. (NASDAQ:AFRM) was one of them. Here is what the fund said:
“We recently covered our short position in Affirm Holdings, Inc. (NASDAQ:AFRM) after a rapid decline brought the share price to ~$30 – down from our entry point above $100 – in only 7 months. We discussed Affirm in our Q4 letter, saying the following:
Affirm is a “Buy Now, Pay Later” (BNPL) company founded by former PayPal CTO and cofounder Max Levchin. They provide installment loans to consumers, partnering with retail companies looking to drive higher sales. They have two primary products: a zero-fee installment loan for consumers with the best credit scores, and a more traditional product with 20%+ interest rates for subprime borrowers. Their stated plan is to disrupt the credit industry with more transparent, lower-fee loans. At a roughly $28b market cap at the start of 2022, AFRM stock was priced at more than 20x trailing sales, a steep price for a money-losing lender. While their early lead in online BNPL transactions and partnerships with fast-growing retailers like Peloton has fueled significant historical growth, a wave of competition has arrived… While the stock has already fallen sharply from where we initiated our short position, we think it could fall another ~40% to trade at 8x FY2022 sales.”
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Disclosure. None. 11 Biggest BNPL Companies in the World is originally published on Insider Monkey in December 2022. The article is updated in January 2023 to reflect the fact that Hoolah was acquired by ShopBack and rebranded as ShopBack PayLater in 2022.