According to the Univdatos Market Insights analysis, the swift approval process and accessibility, regardless of credit score, has been a primary driver of the Buy Now Pay Later Market. As per their “Middle East Buy Now Pay Later Market” report, the global market was valued at USD 12.12 Billion in 2023, growing at a CAGR of 32.5 % during the forecast period from 2024 – 2032.
In recent years, a revolutionary trend has emerged in the Middle East's retail landscape, reshaping how consumers shop and pay. Buy Now, Pay Later (BNPL) schemes, once a Western phenomenon, are now gaining significant traction across the region. This financial service allows shoppers to make purchases and settle payments in interest-free installments, marking a paradigm shift in consumer spending habits.
Consumer Adoption and Preference
The Middle Eastern consumer, known for embracing technological advancements and new shopping experiences, has warmly welcomed BNPL services. The Mastercard New Payments Index 2022 revealed that 73% of regional consumers are familiar with open banking and actively use BNPL options. Moreover, 67% expressed readiness to utilize these services for future purchases, highlighting a growing preference for flexible payment solutions.
Timeline of Evolution
The journey of BNPL in the Middle East began modestly around 2019 with pioneers like Spotii and Tabby, who invested heavily in educating consumers about its benefits and mechanics. By 2021, adoption rates skyrocketed, buoyed by the entry of global players such as Klarna, which solidified the market's foundation.
Strategic Partnerships and Collaborations
Collaborations between BNPL providers and regional businesses have driven this growth trajectory. For instance, Tabby's partnership with Apparel Group in the UAE expanded accessibility to BNPL options, while Klarna's alliance with Namshi bolstered its market reach across the region.
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Advantages for Businesses
Businesses integrating BNPL services stand to gain significantly, enhancing customer acquisition, boosting conversion rates, and increasing average order values. These services cater particularly well to younger demographics, fostering customer loyalty through improved payment flexibility and a superior shopping experience.
Looking Ahead
As the Middle East continues its digital transformation, BNPL services are poised to play a pivotal role in shaping the future of retail. With projections indicating substantial market growth, businesses are urged to embrace these innovations to stay competitive and meet evolving consumer expectations.
Conclusion
The rise of BNPL schemes in the Middle East represents more than just a financial trend; it symbolizes a paradigm shift towards consumer-centric retail practices. By embracing these services, businesses can tap into a burgeoning market and enhance their value proposition in an increasingly digital economy.
Contact Universal Data Solutions, a rapidly growing dynamic market research firm led by a core of dedicated professionals, for further information.
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