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Europe Buy Now Pay Later Industry and Trends 2021

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  • 67 Pages
  • April 2021
  • Region: Europe
  • yStats GmbH & Co. KG
  • ID: 5314766

Buy Now, Pay Later Services Have Gained Momentum During the Pandemic

The report “Europe Buy Now Pay Later Industry and Trends 2021” offers a comprehensive overview of the European BNPL industry and market trends. The publication reveals that European consumers are welcoming BNPL providers during the health crisis and this has spurred established providers as well as newcomers to act fast to win market shares.

The European market provides new perspectives for BNPL service providers

As a result of economic disruptions that happened in 2020 worldwide, BNPL services enjoyed special attention both from merchants and consumers. In Europe, the payment option was offered by one-fifth of retailers, and despite the share being not extremely large, compared to the percentage of retailers accepting credit cards, it still looks encouraging. Moreover, the European market is especially suitable for BNPL services, as their predecessor - payments by invoice - was present on some of the markets for a long time, so that this method becomes a habit of many consumers in Germany, Austria and Switzerland. In these countries, furthermore, invoice payments are still strongly preferred over payments in installments. Nonetheless, in Germany, close to half of those who were aware of the BNPL payment services in 2020, have already used it, and the top expectation of German consumers from the BNPL services were “transparent conditions” and “no interest rate”. Furthermore, a sampling of UK consumers regarding BNPL options showed that the majority of respondents prefer installment payments, rather than paying full amount later, according to this publication.

Established BNPL service providers will have to compete with newcomers in Europe

In 2020 and 2021, during COVID-19, giant BNPL service providers such as Klarna and Afterpay underwent high growth rates. These players significantly expanded their customer base in Europe, and their revenues soared. Nevertheless, the net profits did not enjoy such growth, as they opted for new projects and further market expansion. Sweden-based Klarna, in June 2020 expanded its services to Spain and in February 2021 the company announced plans to offer banking services in Germany. Meanwhile, PayPal opened its BNPL services for French consumers in July 2020. At the same time, several local BNPL newcomers attracted significant capital investments during the health crisis, including Alma, ViaBill, Twisto, Zilch, and Revo, according to the report.

Growth of the BNPL practice attracts the attention of government regulators

In many countries worldwide, local payment authorities raised concerns about the current state of the BNLP industry regulations. Often the practice does not fit the definition of traditional loans, which require interest rate payments, so special rules are needed for these services. For example, in Europe, the European Commission announced the update of current consumer credit agreements to include BNPL service providers and the UK’s Financial Conduct Authority is to introduce new regulations in 2021. National and regional regulators are mainly concerned about consumer default issues due to overspending and lack of transparency about the BNPL service conditions, as detailed in the market report.

Report Coverage

  • This report covers the European buy now, pay later market. The report covers activities of various governments, businesses, banks, and market trends, as well as consumers' preferences and demand drivers.
  • The following countries were mainly considered in this market report: Austria, France, Germany, Poland, Russia, Switzerland, and the UK. Moreover, the report provides an overview of two major BNPL service providers active in Europe: Klarna and Afterpay. The choice of the companies was based on the number of customers their serve, as well as on the fact that all three have different countries of origin.
  • The report contains relevant information about regulations, international comparisons, market trends, BNPL adoption rates and usage, consumer preferences, and players. Not all types of information were included for each country, due to varying data availability.

Report Structure

  • The report starts with an overview of the global overview of regulations applied to the BNPL service providers, BNPL trends and benefits for merchants.
  • Regional chapter follows the global overview and include information on countries’ activities, consumers’ attitude towards BNPL services, and other data points.
  • The market report concludes with the profiles of two major BNPL service providers and their activities during the COVID-19 health crisis.

Please note: For this report, the purchase of an Enterprise license allows up to ten worldwide users of an organization access to the report

Table of Contents

1. Management Summary

2. Global Overview

  • BNPL Regulations Overview, March 2021 
  • BNPL Trends and Benefits for Merchants, March 2021
  • Breakdown of Payment Methods When Booking a Service Related to Travel, incl. BNPL, in % of Adult Travelers, 2020

3. Europe

  • Share of Cross-Border BNPL, in % of Total Cross-Border BNPL Transaction Value, 2025f 
  • Overview of BNPL Startups, incl. Tymit, Montonio, Revo, Zilch, and Alma, March 2021 
  • Breakdown of Select Payment Methods Offered by Merchants, by “Growth” and “Non-Growth” Mindsets of Merchants, incl. BNPL, in %, September 2020
  • Breakdown of Credit and BNPL Providers Used, in % of  Respondents, October 2020
  • Share of Consumers Who Would Like BNPL Added to the Credit Card or Current Account, in % of BNPL Users, October 2020
  • Share of BNPL Users who Prefer to Pay via Installments, and in One Later Lump-Sum Payment, in %, October 2020
  • Average Customer Debt, in GBP, by BNPL Service Providers, and by Age Groups, August 2020 
  • Average BNPL Time to Pay Back, in months, by BNPL Service Providers, and by Age Groups, August 
  • Share of Respondents Who Spent More due to BNPL Option Available, and Share of Respondents Who Missed a BNPL Payment, in %, October 2020 
  • Breakdown of BNPL Usage Cases, in % of BNPL Users, August 2020
  • Breakdown of Payment Methods in Online Shopping, in % of the Total E-Commerce Transaction Value, July 2020 
  • Breakdown of Payment Methods Used for Online Purchases, in % of Respondents, December 2020 
  • Breakdown of Reasons to Choose an Online Payment Methods, in % of Respondents, December 2020 
  • Overview of Oney Bank’ BNPL Activity, March 2021
  • Breakdown of Top Requirements to a BNPL provider, in % of Respondents, 2020
  • Breakdown of the Channels of the Last BNPL Payment, and the Potential BNPL Channel, in % of Respondents, 2020 
  • BNPL Adoption Rate, in % of Respondents Aware of BNPL, and Breakdown of Respondents Attitude Towards BNPL Usage in the Future, by Consumer Type, in % of BNPL Users, 2020
  • Breakdown of Payment Methods Used for Online Purchases, in % of Respondents, December 2020 
  • Breakdown of Reasons to Choose an Online Payment Method, in % of Respondents, December 2020 
  • Breakdown of Payment Methods Used for Online Purchases, in % of Respondents, December 2020 
  • Breakdown of Reasons to Choose an Online Payment Methods, in % of Respondents, December 2020 
  • Overview of BNPL Service Providers, incl. Alma and PayPal, April 2021
  • Breakdown of Payment Methods Offered, incl. Deferred and Installment Payments, in % of Online Retailers, October 2020 
  • Top 5 Banks Offering BNPL Financing, by Value, in RUB billion, by Market Share, in % of the Total BNPL Financing Value, and Year-on-Year Change, in %, October 2020 

4. Major BNPL Service Provider: Klarna

  • Klarna’s Activity Overview, March 2021 
  • Top 10 CNBC Disruptor Companies, incl. Klarna, June 2020
  • Klarna’s Total Net Operating Income, and Net Profit, in SEK thousands, 2016 – 2020 
  • Overall Number of Klarna’s Users, and Klarna’s Monthly Active App Users, in millions, 2019 & 2020
  • Terms of Use of Klarna’s Services, incl. Pay in 4, Pay in 30, Pay Now, and Financing, March 2021
  • Share of Klarna’s User Who Ever Missed a BNPL Payment, in %, October 2020 

5. Major BNPL Service Provider: Afterpay

  • Afterpay’s Activity Overview, March 2021
  • Overview of Afterpay’s, PayPal’s and CommBank’s BNPL Service, incl. credit check, individual purchase price, max credit limit, Use Cases, Payment Plan, and Late Fees, March 2021 
  • Afterpay’s Underlying Sales, Net Transaction Margin, Gross Losses, Total Income, Active Customers, Merchants, FY 2016 – FY 2020, and Year-on-Year Change, in %, FY 2020
  • Share of Transactions via Afterpay that are Paid Back on Time, in %, February 2021 
  • Afterpay’s Share of Late Fees, in % of Afterpay’s Total Income, February 2021 

6. Major BNPL Service Provider: Affirm

  • Affirm’s Activity Overview, March 2021
  • Overview of Affirms’s Key Financial Metrics, incl. GMV, Total Revenue, Transaction Costs, and Adjusted Operating Loss, Q4 2019, Q4 2020, H2 2019, H2 2020
  • Overview of Affirms’s Key Financial Metrics, incl. GMV, Total Revenue, Transaction Costs, Adjusted Operating Loss, and Weighted Average Shares Outstanding, Fiscal Q3 2021e, and Fiscal 2021f 
  • Affirms’s Active Users, in millions, December 2019, June 2020, and December 2020

7. Payment Facilitators Offering BNPL Services

  • Various Facilitators’ BNPL Activity Overview, incl. Stripe, Mastercard, and Shopify, March 2021
  • Share of PayPal Credit’s User Who Ever Missed a BNPL Payment, in %, October 2020





Companies Mentioned

A selection of companies mentioned in this report includes:

  • Affirm
  • Afterpay
  • Alma
  • Amazon
  • Apple Pay
  • Blik
  • Clearbanc
  • Divido
  • Google Pay
  • Greensky
  • Klarna
  • Mastercard
  • PayBright
  • PayPal
  • QuadPay
  • Revo
  • Splitit
  • Stripe
  • Twisto
  • Tymit
  • ViaBill
  • Visa
  • Zilch