According to Bloomberg News, most of the shoppers intend to opt for “buy now, pay later” loans in the next few years. This was the report that highlights the rise in the latest financial products that keep aside the biggest lenders in the world.
A poll was conducted wherein, it was found that 6300 people across the globe found that 20% have already availed of the concept of “buy now, pay later” loans whereas, 60% of the prospective customers think that they would try the concept within the next couple of years. This is in sharp contrast to the 45% of the people that said they will make use of the cryptocurrencies very soon, as per a report that was published Thursday by Capgemini SE consultancy, according to Bloomberg News.
Fintech companies like Klarna and Afterpay Ltd, have grown by leaps and bounds after extending customers the option wherein they can buy now and pay later option that allows them to make payments in installments while they purchase online. In fact, following the Fintech companies’ efforts to extend the service, these companies have become multibillion-dollar firms.
The concept of buy-now, pay later experts have already managed to channelize approximately $10 billion as yearly revenues away from the banks, as per research conducted by McKinsey in July.
This surge has made regulators scrutinize those who have been expressing concern about money laundering and the risk that it might pose for unaffordable borrowing. However, simultaneously, the traditional market comprising Mastercard Inc. and Goldman Sachs Group Inc. is trying to make inroads into this consumer market as well.
Around two-thirds of the executives from banks that were polled by Capgemini said firms like PayPal Holdings Inc, Square Inc., and Stripe Inc appear to be bigger competitors as compared to the lenders long-established.
Bloomberg News reports that the overall percentage of non-cash payments rose by only 8% in 2020, following years of only double-digit growth that slowed by the coronavirus pandemic. Capgemini said that while the world economy recovers, there will still be a growing demand for alternative forms of payments like cryptocurrency, digital wallets, and wearable payments.