Buy Now, Pay Later (BNPL) services appear to be the flavor of the season, with numerous platforms offering similar deals for this holiday season and beyond.

The industry accounted for 2% of worldwide consumer lending in 2020, with a volume of over $97 billion. This model has already disrupted TradFi, with FinTechs pulling between $8 billion and $10 billion in annual revenue.

Moreover, this disruption has now crossed TradFi’s boundaries and entered into DeFi. With the integration of blockchain and cryptocurrencies, BNPL platforms are shaping the future of finance and eCom. The industry’s mantra of “invest now, win later” is now becoming a reality through blockchain and DeFi.

More freedom and less commitment  

Gen Z and younger millennials have been more cautious about spending, debt, and hidden fees than older generations. That’s a result of being raised in the aftermath of the 2008 financial crisis and graduating into poor job markets. As digitally informed customers, they have new expectations for financial services. They desire comfort and ease of use and value goods that seamlessly interact with the other applications they use.

But, TradFi services have failed to entice this new generation of consumers. Tis is due to their high-interest rates, stringent restrictions, and complicated lingo. However, emerging solutions like Buy Now, Pay Later platforms are garnering massive attention. They are simplifying finance for consumers with their unique approach to personal finances.

BNPL platforms offer the same advantage as credit cards but without the commitment and interest rates. Moreover, users may begin utilizing the services immediately, sometimes application or background checks can be less stringent. They can also postpone payments for longer periods of time than monthly credit card billing cycles, which gives them more flexibility in managing cash flows.

@Pay is one such platform simplifying finance for the masses. It is a DeFi protocol integrating blockchain technology with its own cryptocurrency to power its BNPL model. The platform offers significant cost savings to all participants in the ecosystem by utilizing smart contracts and blockchains. It aims to be a key participant in offering DEFI e-commerce and in-store solutions to shoppers and merchants. 

Social media and eCommerce driving further expansion

The emergence of social eCommerce is another changing factor that is strongly related to the BNPL boom. The combination of social media and eCommerce has proven to be a game-changer, driving further expansion of BNPL platforms. 

This has also created a requirement for all businesses with an online shop to optimize their checkout experience in order to remain competitive, emphasizing the value that the Buy Now Pay Later model provides to the e-commerce landscape.

Traditional payment methods may become increasingly cumbersome to both customers and sellers in the future as the ability to purchase straight from one platform becomes a critical component of generating conversions. With digital-native generations constituting larger portions of the customer landscape, more DeFi platforms may enter this dynamic landscape, further blurring the barriers between entertainment and banking.

Towards the future of finance 

BNPL services, as the next wave within the crypto industry, are positioned to further disrupt the DeFi environment. Given the long-term financial effect of Covid-19, especially among younger generations, Buy Now Pay Later platforms may gain immense traction in the future. With more platforms like @Pay entering the fray, the market will become increasingly competitive, with startups battling for customer attention and market dominance.

While the Buy Now Pay Later concept has mainly been applied to retail and eCommerce, the business model is adaptable to a wide range of other sectors. It is possible that these services may spread to other industries, such as grocery and physical stores, opening the door for new omni-channel applications.

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