So-called "buy now, pay later" services like Klarna are expected to see significant growth in the coming years, with market capitalization expected to reach $995.000 billion by 2026, according to new forecasts. A Juniper Research report says these services, which are often integrated with online payment options, are expected to grow 274% of the expected €226 billion by 2021. Consumers are increasingly asking for more flexible payment options , and many choose fixed payment plans and flexible credit accounts to help them share the cost of goods, especially when they have out-of-pocket expenses. While regulations are expected to place restrictions on some payment options, including increased rate caps and affordability controls, overall, the buy-now-pay-later lure is proving a practical solution for many digital shoppers. . However, the research also recommends that companies now offering payment services in the future should "focus on improving transparency and use of credit scoring and reporting now to minimize disruption in the future."
Buy now pay later
Buy now pay later may not always find favor with consumer groups, but it certainly doesn't look like it's going away anytime soon. Research results suggest that it will account for more than 24% of global e-commerce transactions of physical goods by value. It is currently only 9% by 2021. Research co-author Damla Sat explains: “As a cost-splitting tool for users, buy now pay later is ideal for high-value items as it allows Users transparently divide large costs into smaller, more manageable payments. By 2026, these platforms will also increasingly become the standard for lower-cost purchases; driven by user demand and ecommerce platform integrations. The number of consumers using Buy Now Pay Later is already healthy, with 340 million expected to choose flexible payment options at checkout this year. But by 2026, Juniper Research results predict that users who enjoy the flexibility to buy now and pay later will exceed 1.500 billion. The report also suggests that it is therefore prudent for online merchants to implement the option or risk losing out when shoppers move their transactions to other payment platforms that offer more flexible payment options.