The payments industry is now lucrative for start-ups to tap into new niche market segments and promote financial inclusion in groups with limited access to credit services from banks. The buy now, pay later (BNPL) solution has emerged as an alternative credit payment for consumers, enabling them to make purchases without paying the total amount upfront. The solution allows consumers to make monthly payment installments within three to six months with no interest charge. BNPL solutions are increasingly available online and in physical stores.
The Southeast Asian BNPL space is highly fragmented and competitive, comprising BNPL providers, electronic commerce (eCommerce) companies, multiservice providers, and banks. Strongly funded participants dominate the market, potentially pushing weaker participants out of business in the long run. Market consolidation is ongoing and expected to continue as bigger participants acquire smaller ones. Domestic participants will embrace consolidation for more capital and market share to compete with leading global BNPL providers, which are expected to penetrate the market in the region.
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