‘Buy Now, Pay Later’ sales to surge in 2024

CEBU, Philippines — The Gross Merchandise Value (GMV) for purchases made through buy now, pay later (BNPL) options is seen to surge by 173 percent in 2024.

According to a study conducted by UnaCash, a leading provider of in-app and in-store financing solutions, the increase is attributed to the rising prevalence of mobile commerce (mCommerce).

The number is a wide increase from GMV of items bought via BNPL in 2023 (154 percent), 2022 (178 percent), and 2021 (118 percent), indicating a clear synergy between the BNPL market and the mobile commerce market.

“Buy Now, Pay Later is consistently on the rise. This can be regarded as a modern digital-era payment solution, not just in the Philippines, which offers convenience to both consumers and its partner merchants by minimizing the initial cost of purchases. Innovative upgrades like point-of-sale loans will allow this payment method to experience remarkable growth in the years to come,” said Aleksei Kosenko, president of UnaCash.

The BNPL concept allows consumers to purchase products immediately and avail through convenient installment periods. There are approximately 15 percent of all online transactions in the Philippines utilize BNPL solutions, which has further amplified its relationship with the purchasing behavior of consumers.

The study uncovered that use of m-commerce, — conventionally understood as online transactions carried out on wireless devices, such as smartphones, smartwatches, or tablets —  has doubled over the past five years.

By the end of 2022, more than half of the Philippine population was involved in mobile commerce, with penetration reaching 55 percent. Every year, the percentage of mobile commerce usage increased by an average of six percent. The largest increase in the indicator was observed in 2020, at 12percent — primarily due to the impact of the pandemic.

In terms of sales, m-commerce had an average annual growth rate of 47.4 percent from 2018 to 2022. The most significant surge occurred in 2019, with a remarkable increase of 63.4 percent in sales through m-commerce, signifying a 4.7-fold increase or an equivalent of P243.3 billion. By 2022, it was worth P308.7 billion.

M-commerce has gradually increased its share in the larger e-commerce industry, initially having just a 16 percent stake in 2018 to a historical high of 74 percent in 2022. The share of m-commerce in e-commerce is projected to reach 80 percent by 2024.

UnaCash also estimates that the e-commerce market in the Philippines will grow 84 percent by 2024, considering the doubling of mobile commerce use from 2018 to 2022.

The e-commerce audience in the Philippines, predominantly mobile, are persons aged 25-34 years old, making up more than 30 percent of users, followed by those aged 18-24 years.