Another wave of consumer BNPL startups is taking the model to new markets – TechCrunch

Buy now, the pay later market (BNPL), estimated to be worth $ 120 billion by 2021, has grown significantly over the last few years. But for most of its rise to virtual box office prominence, BNPL has largely targeted everyday consumer goods such as clothing from Urban Outfitters or a Peloton. Now the credit method is moving beyond its e-commerce roots.

In the last few months, large companies have joined the BNPL market, also in the hope of quickly being able to approve consumers for installment loans.

Established players such as Mastercard and Visa have launched BNPL services through their respective credit cards; Mastercard also estimated that $ 7.2 trillion in transaction value will happen through BNPL by 2025. Stripe has also recently partnered with BNPL Heavyweight Affirm to offer payment plans to any business on its platform.

But as several large financial services companies seek to integrate BNPL into everything, a new fleet of startups in the early stages seeks to improve strategy and offer tailored versions of BNPL to specific industries ranging from health care and childcare to groceries to even charitable donations.

While these services can help consumers access expensive necessities – in the case of medical bills or childcare – is it really a good idea for consumers to start paying even more in installments?

Kathleen Blum, vice president of shopper insights at C + R Research, is not so sure. The strategy has proven to persuade consumers to spend beyond their means and has already pushed some users into debt.

“Many of the people who use buy now pay later, from a demographic point of view, tend to be a little less financially secure,” Blum TechCrunch said. “There really is no good credit check. Are they really attentive? Do they understand the complications of any of it?”

However, this new fleet of startups makes a compelling argument as to why they should not be perceived in the same way as the first wave of BNPL startups.

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