![]() ![]() No matter what electronic you’re looking for, we want to arm our readers with the proper knowledge to make a good buying decision and not become swayed by the advertising and marketing that we may not even recognize is affecting us. But it’s more than just specs and allure that make an electronic a truly great product. Companies love to throw out twinkling numbers and stats that seem impressive to spark the next buying trend of the year. Modern marketing has completely reshaped consumer behaviour, and not always in the best of ways. Following this, Block announced that it would acquire the leading Australian BNPL provider Afterpay for USD 29 billion, a 31% premium to its market value, via a share swap.Afterpay Electronics – How to Get the Best Value ![]() The product seems to be an extension of its installment financing for Mac and iPad purchases made through the Apple Card. More recently in July 2021, it was reported that Apple was working with Goldman Sachs on its in-house BNPL product “Apple Pay Later”. Prominent banks such as JPMorgan Chase, Citizens Bank, and Citibank compete on larger balance sheets, lower cost of funds, better underwriting models, and an established customer base acquired through their core offerings. Leading startups such as Klarna, and Affirm focus on monetization through the merchant, while credit card networks focus on the shopper as the primary avenue for BNPL monetization. In addition, incumbents frequently invest in BNPL startups, with all four credit card network providers having participated in startup funding rounds. However, while the solutions from incumbents like Visa may be restricted to one specific network, leading disruptors establish partnerships across networks to appear more attractive to merchants and shoppers. Leading payment technology providers and credit card networks such as PayPal, Block (formerly Square), Visa, Mastercard, and American Express offer B2C solutions leveraging their existing merchant and customer reach. Furthermore, their existing merchant reach allows them to bypass re-integration with merchant checkouts, translating to a competitive edge. This is an expected strategy, given that installment financing is an extension of their core products. Incumbents in the BNPL space include banks, credit card network providers, and payment technology providers that commonly enter the industry by developing in-house products. ![]() Due to the heterogeneous nature of the product, incumbents and disruptors compete on merchant and customer reach, with incumbents such as PayPal, Visa, and Mastercard possessing a competitive advantage in this area.Ĭore offerings form the foundation for BNPL solutions developed in-house They provide in-house BNPL offerings that are an extension of their core products (e.g., credit cards and digital wallets). Incumbents typically include banks, credit card networks, and financial service providers that offer B2C apps. Hence, monetization opportunities may be limited for infrastructure players. One possible reason could be that retailers prefer to take advantage of the brand value of large players by integrating with them instead of building in-house BNPL payment options. The BNPL infrastructure segment is the least populated, with only a handful of startups. Startups from the B2C (app + virtual card) segment account for the majority of total funding and include large players such as Affirm, Klarna, and Zip Co. The heavy B2C focus is a result of BNPL services being used primarily as an e-commerce payment method and the relatively low barriers to entry. Moreover, the solutions are popular among merchants who want to reduce cart abandonment rates and increase conversions, particularly to appeal to younger generations.īNPL industry players operate in four segments, with the B2C (app) niche housing the bulk of startups in the space. This short-term financing solution has gained traction among Gen Z and millennial demographics in the US and has been boosted by rising growth in ecommerce within the country. It is even suited for short-term financing for smaller-ticket items, driving its recent surge.īNPL commonly offers deferred payment options to shoppers at online and in-store checkouts, allowing the customer to pay for goods in installments, typically over 2–6 months. However, unlike layaway plans, mainly used for big-ticket items such as furniture or electronics that the customer receives upon full payment, BNPL allows a consumer to own the product immediately. Buy now, pay later (BNPL, also referred to as “point-of-sale financing” or “installment Buy now, pay later (BNPL, also referred to as “point-of-sale financing” or “installment financing”) is an evolution of traditional layaway plans that allows customers to purchase a product and pay over time. ![]()
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