Data and analytics company Global Data has recently released a new report focusing on the BNPL market in New Zealand, which is estimated to reach approximately USD 2 billion by 2026. Global Data’s ecommerce analytics shows that Kiwis are more interested in alternative and flexible payment methods, with BNPL becoming more popular in the country.

The payment method’s transaction value in the country is expected to grow at a compound annual growth date (CAGR) of 16. 7% in the next three years, reaching NZD 2. 7 billion (approximately USD 1.

9 billion) by the end of 2026. A popular method of short-term credit for global Millennials and Gen Zs BNPL has become a popular tool around the world for people looking to sustain an increasingly expensive lifestyle, amid current global economic turmoil. Spikes in inflation rates, a stagnation of salaries, political uncertainties, and a potential new recession in a post-pandemic world represent the premises of a new wave of personal credits.

Buy Now, Pay Later has increased in popularity in New Zealand too, due to surges in demand for short-term credit, combined with growing consumer preference for online shopping, especially among Millennials. Furthermore, the COVID-19 pandemic severely affected consumers’ disposable incomes, not only mobility, which fuelled the demand for flexible short-term consumer financing solutions. A rising payment method sparks competition for market share As people are looking for alternative ways to finance their increased cost of living, many providers of BNPL services have entered the New Zealand market in the past couple of years.

According to GlobalData’s 2022 Financial Services Consumer Survey, Afterpay is the post popular BNPL provider, closely followed by Laybuy, Zip, and Klarna. The latter recently entered the market, in May 2021, with its popular ‘Pay in 4’ option which allows customers to pay for their online purchased goods in four equal instalments, with zero interest. Given the consumers’ appetite for BNPL products, the country’s officials proposed a new regulation to protect customers from falling into debt trap, back in November 2022.

According to the regulation, BNPL providers are required to assist borrowers into making informed decisions and help them with repayment during unforeseen circumstances. At the same time, BNPL services are required to assess a consumer’s repayment capacity before offering credit lines above NZD 600 (approximately USD 400). .