Top 10: Buy Now, Pay Later Platforms

The ascendancy of Buy Now, Pay Later (BNPL) platforms has markedly transformed the retail sector, offering consumers a novel approach to credit. 

With BNPL transactions surpassing 2 billion in 2023, these services have swiftly expanded from online to in-store purchases. 

The surge in popularity can be attributed to the e-commerce boom and technological advancements, facilitating seamless integration for both merchants and shoppers. 

As BNPL continues to evolve, we look at the top 10 BNPL platforms on the market today.

10. Openpay

Openpay is the Australian fintech firm founded in 2013 by Yaniv Meydan and Richard Broome. It has carved out a niche in the BNPL sector, focusing on larger purchases in healthcare, automotive and home improvement. The company expanded its offerings to include a B2B SaaS product for trade account management in 2019. Following receivership in February 2023, the company's OpyPro B2B platform was sold for AU$10m, with Openpay delisting from ASX in August 2023.

9. Zip

Formerly known as QuadPay, Zip has emerged as a prominent player in the BNPL sector. Founded in 2013 in Sydney, Australia, Zip has expanded its reach to serve millions of customers across multiple countries. The platform offers interest-free payment options for purchases at major retailers like Apple, Amazon and Walmart. In 2023, Zip reported a gross merchandise value of AU$7.1bn. The company has diversified its offerings beyond retail, venturing into sectors such as education and travel. Zip's mobile app facilitates one-click purchases and seamless in-store payments, contributing to its growing user base.

8. Tamara

Founded in 2020 by Abdulmajeed Alsukhan, Turki Bin Zarah, and Abdulmohsen Albabtain, Tamara has rapidly become a leading BNPL platform in Saudi Arabia. The company was the first to receive a SAMA sandbox license for BNPL services. Tamara's growth has been remarkable, with its user base expanding by 180% month-on-month in 2021. The platform secured a record-breaking US$110m Series A funding in April 2021, led by Checkout.com. By December 2023, Tamara had raised US$340m in a Series C round, achieving unicorn status with a valuation exceeding US$1bn.

7. Tabby

Tabby has rapidly become a leading BNPL platform in the Middle East since its 2019 founding. The UAE-based fintech achieved unicorn status in December 2023, securing US$250m in Series D funding and reaching a valuation of US$1.5bn. Tabby processes approximately US$6bn in annual transaction volume and boasts over 10 million registered users. The company has expanded its offerings beyond traditional BNPL services, introducing the Tabby Card in the UAE and developing the Tabby Shop feature, which hosts over 2 million products from its 30,000 merchant partners.

6. Sezzle

Sezzle, founded in 2016 by Charlie Youakim, Paul Paradis and Killian Brackey in Minneapolis, offers a unique BNPL service. The platform allows customers to split purchases into four interest-free instalments over six weeks. Sezzle went public on the Australian Securities Exchange in 2019, raising US$30m. By June 2021, it boasted over 10 million user sign-ups and 48,000 participating merchants. In 2020, Sezzle became the first BNPL company to incorporate as a Public Benefit Corporation, emphasising its commitment to financial empowerment. The company has expanded into Canada and Brazil, and partnered with major retailers like Target.

5. Afterpay

Afterpay, founded in 2014 by Nick Molnar and Anthony Eisen, pioneered the "pay in 4" model in the Buy Now, Pay Later sector. The Australian fintech rapidly expanded globally, operating in the UK, Canada, US and New Zealand. In 2021, Afterpay processed AU$22bn in transactions and boasted 16 million active customers. The company's success attracted Square (now Block, Inc.), which acquired Afterpay for US$29bn in January 2022. Post-acquisition, Afterpay has diversified its offerings, launching BNPL for subscriptions in the US market and integrating with Block's ecosystem to enhance its merchant and consumer services.

4. PayPal Pay in 4 

PayPal Pay in 4 is a BNPL service that allows customers to split purchases between US$30 and US$1,500 into four interest-free instalments over six weeks. This offering complements PayPal's existing 'Pay Later' options, including Easy Payments and PayPal Credit. The platform conducts soft credit checks, which don't affect users' credit scores. PayPal Pay in 4 has contributed to increased conversion rates for merchants, with RBC Capital Markets reporting a 20% to 30% boost. The service is widely accepted online and at numerous in-store locations, leveraging PayPal's extensive user base of 426 million globally.

3. Affirm

Affirm, founded by PayPal co-founder Max Levchin, has become a leading BNPL platform in the United States. The San Francisco-based company went public in January 2021, raising US$1.2bn in its IPO. Affirm's service is integrated with major retailers like Amazon, Walmart, and Target, offering consumers flexible payment options for purchases. As of 2023, Affirm reported over 18 million users and an annual Gross Merchandise Value of US$20.2bn. The company employs machine learning in its underwriting process, aiming to provide higher loan approval rates while ensuring responsible lending practices.

2. Splitit

Founded in 2012, Splitit offers a unique approach to BNPL services by utilising customers' existing credit cards. The platform allows shoppers to split purchases into interest-free instalments without additional credit checks or applications. Splitit's white-label solution enables merchants to maintain brand consistency throughout the checkout process. In April 2023, the company introduced SplititExpress, promising a two-second checkout experience. Splitit has forged partnerships with major payment networks like Visa and Mastercard, and integrates with e-commerce platforms such as Shopify and WooCommerce. The company charges merchants 1.5% per transaction plus US$1.50 per instalment.

1. Klarna

Founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson in Stockholm, Klarna has become a global leader in the Buy Now, Pay Later sector. The company serves over 150 million customers across 45 countries, partnering with 450,000 merchants. Klarna's innovative approach includes a shopping app with price-drop notifications and a rewards programme called Vibe. In 2021, Klarna processed US$80bn in gross merchandise volume. Despite its success, the company faced challenges in 2022, with its valuation dropping from US$45.6bn to US$6.7bn amidst a broader fintech downturn.

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