Buy now, pay later 💸

The buy now, pay later (BNPL) payment method is becoming a popular, alternative way for shoppers to finance online purchases through interest-free installment payments. Since online shopping has surged as a result of COVID-19, BNPL usage has also risen, growing at a CAGR of 13+%, and is on track to reach $680BN in transaction volume worldwide in 2025. According to The Ascent, over a third of US consumers have used a BNPL service, a growing alternative to owning a credit card, especially for millennials. 

Credit: Klarna

While most BNPL solutions are offered online, they are starting to make an appearance in stores as well. There are a number of fintech companies that offer BNPL services, but larger financial institutions, including major credit card companies, are now competing in the BNPL space. 

• Klarna is a publicly-listed Swedish bank that offers various payment solutions including the BNPL installment plan options. The company entered the US market in 2015 and has aggressively challenged major credit card companies. In March 2020, Ant Financial Group took a majority stake in the company. 
• Affirm is a recently IPOed technology company that offers the BNPL payment solution for new purchases as well as favorable credit lending in comparison to traditional banks and credit card companies. The San Francisco-based company raised $1.2BN after publicly listing under the ticker AFRM this month. 
• Afterpay is a publicly-traded Australian fintech company known for its BNPL solution. It has over 13 million US users as well as nearly 64,000 retail partners globally and is one of the leaders in the BNPL space.
• Splitit is a publicly-traded company born out of Israel, with headquarters in New York. It listed on the Australian market in 2019 and is ramping up its presence in the US. It has partnered with fintech startup Stripe and with Mastercard. 
• Quadpay is a New York-based fintech company that was acquired in June 2020 by Zip Co, a publicly-traded Australian payment company. Founded in 2017, it is one of the younger competitors in the busy BNPL space.
• Sezzle is a publicly-traded payment processing company headquartered in Minneapolis. It listed on the Australian stock exchange in 2020 and had a record IPO. The company differentiates itself from other BNPL companies by legally declaring itself as a public benefit corporation (PBC) which means its mission includes leaving a positive impact on the community at large in addition to maximizing profits for shareholders.