In a recent study, Redseer Strategy Consultants shared that the use of Buy Now, Pay Later (BNPL) services is on the rise in the Middle East. The UAE and Saudi Arabia outscored their regional peers.
According to a June 2024 report authored by Sandeep Ganediwalla and published by Redseer Strategy Consultants, “The Buy Now, Pay Later (BNPL) industry has experienced massive growth in the UAE and KSA. In 2022, 1 in 10 consumers was using BNPL services, but by 2023, this figure had doubled, with 1 in 5 consumers leveraging BNPL options for their purchases. This surge highlights the increasing adoption and trust in BNPL as a convenient and flexible payment solution in these regions.”
Said Murad, senior partner at Global Ventures, believes that, “BNPL makes a lot of sense for a region like the Middle East where many consumers are unbanked or underbanked. Thanks to BNPL these individuals can make purchases they might otherwise be unable to make.” He adds that, “… another key factor is that BNPL is mobile-friendly. This bodes well for a region where internet penetration is high, reaching almost 99 percent in the UAE and KSA. Murad believes the growth of BNPL also ties in with the rapid pace of digital transformation in the two countries.”
Ganediwalla explains that, “the UAE and KSA population is tech-savvy and has a high banking penetration. However, credit card penetration in these regions has been low, especially in KSA. This has created an opportunity for BNPL players and hence its increased adoption in the region.”
For businesses, Ganediwalla adds that, “BNPL helps attract new customers while also increasing their average spending by increasing affordability amongst consumers. BNPL has also helped improve conversions as it simplifies the checkout process and potentially reduces cart abandonment.”
