Top Buy Now Pay Later Companies

The buy now pay later market has seen an increase in popularity due to the demand of consumers for flexible, interest-free payment options. The rapid increase in the number of transactions made digitally and through e-commerce has created an environment where BNPL is favoured by many consumers, especially millennials and Gen Z, because they can break up larger purchases into smaller, more manageable payments instead of using a credit card. Consumers find it easier to budget and afford their purchases through BNPL rather than credit cards. The recent increase in online retail, mobile commerce and the popularity of apps have also contributed to the growth of BNPL.

Industry Overview

According to SkyQuest Technology “Buy Now Pay Later Market By Channel (Point-of-sale, Online), By Organization Size (Small & Medium Enterprises, Large Enterprises), By Demographic, By Industry, By Region - Industry Forecast 2026-2033,” Global Buy Now Pay Later Market is projected to grow at a CAGR of over 22.6% by 2033, on account of urgent need for automating quantified data. Consumers enjoy the experience of using BNPL when they checkout because it's quick and easy. Merchants are encouraging customers to use BNPL for their purchases and have noticed an increase in their conversion rates, a decrease in the number of items left in the cart and an increase in price-sensitive customers. BNPL has proven to be a great tool for enabling sales and driving conversion. The global buy now pay later market is expected to continue growing due to several factors, including an increase in the number of people who own a smartphone, the innovation of financial technology (fintech) and the increase in partnerships between BNPL service providers, retailers and payment gateways.

Top 10 Global Buy Now Pay Later Companies

1. PayPal

PayPal, through its more than 400 million active accounts, has established itself as the top BNPL provider globally. Unlike standalone BNPL services, PayPal include their "Pay in 4" and "Pay Monthly" options into the payment process at checkout of hundreds of thousands of merchants worldwide. In 2024, PayPal's strategy will focus on "Pay Later" messaging that appears dynamically as a user is browsing, enabling merchants to increase their average order value by more than 50%.

2. Klarna

Klarna, Europe's most valuable fintech company and the first to introduce a payment button, has now evolved into an "AI shopping assistant". In 2024, Klarna will shift to a profit orientation by using OpenAI technology to respond to approximately two-thirds of their customer service inquiries.

3. Affirm

Affirm takes a different approach by using a "pro-consumer" model; it does not charge late fees or compound interest. Affirm was founded by Max Levchin, one of PayPal's founders, and focuses on high-value purchases such as electronics and fitness equipment. They allow customers to purchase these items in several monthly installments, with up to 60 months in total to complete the payment.

4. Afterpay

Afterpay is a division of Block, Inc., through its subsidiary, Clearpay, which is the leading BNPL provider in Australia and one of the leading BNPL providers in the US and UK. Afterpay's business model consists of a simple 4 equal payments made over a 6-week period.

5. Zip Co

The "Shop Anywhere" model of Zip Co (previously Quadpay in the US), has made it possible for its users to use BNPL at retailers who do not directly partner with Zip. In 2024, Zip has been able to drastically improve its unit economics by focusing on its home country of Australia and the United States, exiting all areas where the economics are inefficient.

6. Sezzle

As a B Corp-certified fintech, Sezzle is viewed as the "ethical" BNPL provider in the marketplace. Sezzle is also the first company to offer the "Sezzle Up" feature to its customers, allowing them to build their credit score by reporting their on-time paid Sezzle invoices to credit bureaus.

7. Kredivo

In Southeast Asia, Kredivo is the dominant BNPL provider, particularly in Indonesia where there is little penetration of credit cards. Kredivo has developed an AI-based credit score model, using data from a user's mobile device and telecommunications provider to provide instant credit.

8. Scalapay

Scalapay is the dominant BNPL provider in Southern European markets, specifically Italy, France and Spain. Scalapay has focused on luxury fashion and travel brands, offering customers the opportunity to try on clothing and cancel orders before any funds have been deducted from the customer's account. In 2024 Scalapay expanded its offerings by launching the "Scalapay Club" subscriptions and "Pay Later 14 Days" plans.

9. Tabby

Tabby was founded in Dubai and Riyadh as the first unicorn fintech in the Middle East and is currently dominating both countries' retail industries. It has made an impact throughout the UAE and Saudi Arabia by offering 4 types of interest-free installments, as well as a strong cashback program. At the end of 2024, Tabby raised a considerable amount of capital to fund its expansion efforts about creating additional Tabby Card physical locations, which will increasingly be used for grocery, gas, and everyday expenses.

10. Splitit

Splitit provides a platform to merchants for a "white-labelling" solution, unlike its competitors. Splitit does not extend credit to consumers; rather, it allows the merchant to utilize the customer's available credit card limits for authorizing the full amount of the purchase at the time of sale. Therefore, merchants have no credit risk as defined by a traditional BNPL program, and customers are able to avoid the hassle of applying for new credit.

Other Leading Global Buy Now Pay Later Companies

• Klarna
• Affirm
• Afterpay
• PayPal
• Zip Co
• Sezzle
• Splitit
• Tabby
• Tamara
• Kredivo

Conclusion

The buy now pay later market is growing into an emerging global disruptor for finances and how people manage funding for purchases. The growing acceptance of these flexible payment options via the use of innovation in the Fintech space by merchants has allowed for more consumers to have easy access to an alternative means of credit. In addition, the ability for BNPL to continue to grow into the mainstream market can be attributed to a combination of regulatory scrutiny and credit risk management practices, along with continued technological innovation and responsible lending practices. Overall, BNPL will most likely serve as a core component of the future global payments market.