BNPL continues to gain traction with Square’s $29b acquisition of Afterpay

Afterpay accounts for 7.7% of Australia’s e-commerce market.

The buy now, pay later (BNPL) space continues to gain prominence in the Asia-Pacific, as highlighted by US-based Square, Inc.’s acquisition of BNPL solution provider Afterpay for US$29b, reports data and analytics firm GlobalData.

“BNPL has been gaining prominence in Asia-Pacific with a large number of payments and fintech companies looking to get a slice of this market,” said Ravi Sharma, lead banking and payments analyst at GlobalData.“Square’s announcement to acquire Afterpay is the latest development in this space, as it looks to expand into the growing BNPL market."

Afterpay, which is a major BNPL operator in Australia, reported global sales of US$10.1b in the first half of the fiscal year ended 31 December 2020, a 112% growth compared to 2019. It also added nearly 23,000 new customers daily to its platform in the same period.

GlobalData’s 2021 Banking and Payments Survey indicates that Afterpay accounts for a 7.7% share of the total Australian e-commerce market, compared to 5.5% in 2020.

It is currently active across four markets: New Zealand, Australia, the US, and Canada.

With the pandemic having impacted income levels, consumers are increasingly preferring BNPL payment methods to make purchases affordable, Sharma concluded.

Photo courtesy of Dan Freeman