Study: More consumers will choose ‘Buy Now, Pay Later’ services in 2024

Business.(Business File photo)

THE demand for Buy Now, Pay Later (BNPL) services has consistently gained traction and is showing no signs of abating.

A recent study conducted by UnaCash, a provider of in-app and in-store financing solutions, predicts a substantial 173 percent surge in the gross merchandise value (GMV) of purchases made through BNPL options by 2024 to be driven by the increased usage of mobile commerce, which is also known as m-commerce .

This projection is a wide increase from GMV of items bought via BNPL in 2023 at 154 percent, 2022 at 178 percent, and 2021 at 118 percent.

UnaCash also estimates that the e-commerce market in the Philippines will grow 84 percent by 2024, considering the doubling of m-commerce use from 2018 to 2022.

GMV is the total value of all the products or services sold on a platform before accounting for any discounts, returns, or other deductions. It’s a measure often used in online marketplaces to show the total economic activity happening on that platform.

“Buy Now, Pay Later is consistently on the rise,” said Aleksei Kosenko, president of UnaCash.

“This can be regarded as a modern digital-era payment solution, not just in the Philippines, which offers convenience to both consumers and its partner merchants by minimizing the initial cost of purchases.”

Kosenko said innovative upgrades like point-of-sale loans will allow this payment method to experience remarkable growth in the years to come.

BNPL allows consumers to purchase products immediately and avail themselves through convenient installment periods.

According to UnaCash, there are approximately 15 percent of all online transactions in the Philippines which utilize BNPL solutions.

The use of m-commerce, — conventionally understood as online transactions carried out on wireless devices, such as smartphones, smartwatches, or tablets — has doubled over the past five years. At the end of 2022, more than half of the Philippine population was involved in mobile commerce, with penetration reaching 55 percent.

Every year, UnaCash said the percentage of mobile commerce usage increased by an average of six percent. The largest increase in the indicator was observed in 2020, at 12 percent — primarily due to the impact of the Covid-19 pandemic.

In terms of sales, m-commerce had an average annual growth rate of 47.4 percent from 2018 to 2022. The most significant surge occurred in 2019, with an increase of 63.4 percent in sales through m-commerce, signifying a 4.7-fold increase or an equivalent of P243.3 billion. Last year sales stood at P308.7 billion.

Moreover, m-commerce has gradually increased its share in the larger e-commerce industry, initially having just a 16 percent stake in 2018 to a historical high of 74 percent in 2022. The share of m-commerce in the e-commerce space is projected to reach 80 percent by 2024.

The e-commerce audience in the Philippines, predominantly mobile, are persons aged 25 to 34 years old, making up more than 30 percent of users, followed by those aged 18 to 24 years.


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