The news: Two more banks plan to offer buy now, pay later (BNPL) services as demand for the financing option surges.
How we got here: Revolut and Suncorp join a growing cohort of banks exploring BNPL solutions with hopes to get in the space early.
The Commonwealth Bank of Australia (CBA) just announced a partnership with Klarna to bring BNPL to its vast retail network, and Citibank will launch a BNPL product in Australia in October, as two examples.
The financing solution has long been popular in Australia: 48% of internet users in the country reported using a BNPL service in the past 12 months compared with 28% in the US, per an April 2021 Leger survey. Australia thus tends to act as a testing ground for BNPL providers, signaling what may be next in other markets.
The bigger picture: The consumer-facing BNPL market is getting more intense as providers experience massive growth and look to reshape financial services by becoming super apps. By getting in on the space, banks can capitalize on this growth and fend off competition from BNPL players, which have been creeping into their banking territory.
Related content: Eager to read more about Revolut’s BNPL ambitions? Check out what our Banking analysts have to say.
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