The Buy Now Pay Later (BNPL) trend is rising in Singapore. The BNPL industry has experienced strong growth over the past year. This growth is largely driven by increased e-commerce penetration. Singapore’s FinTech Association (SFA) is recognizing BNPL as a major emerging trend in the FinTech ecosystem of the country.
In 2024, the BNPL industry in Singapore is expected to grow at a compound annual growth rate (CAGR) of 13.5% and it will reach approximately US$1.19 billion in payments.
Several factors contribute to the growth of the BNPL industry. There is a growing demand for flexible payment options among consumers. The rise of digital wallets and mobile payments has further fueled the growth of BNPL. Moreover, small and medium-sized enterprises (SMEs) are increasingly adopting BNPL services to provide flexible payment options to their customers.
Let’s understand what Buy Now Pay Later (BNPL) and What is the code and conduct in Singapore are for BNPL.
What is Buy Now Pay Later (BNPL)?
Buy now pay later (BNPL) is a short-term financing option that allows consumers to purchase without paying and they can pay for it later in interest-free installments.
Many businesses like e-commerce use BNPL to increase sales and attract new customers. Businesses, that are using BNPL, are seeing significant revenue growth. These services are available through online and in-store purchases, and through various other channels.
Digital platforms are driving the growth of BNPL. They are making it popular among both small retailers and large companies. Companies are adopting BNPL to increase consumer spending and improve conversion rates.
How does Buy Now Pay Later (BNPL) work?
This method lets users delay payments to a future date without any additional fees, which is a huge benefit. BNPL services allow consumers to split their payments into multiple installments. BNPL offers consumers a flexible and accessible way to pay over time without interest, as long as payments are made on time. This alternative payment method helps customers avoid upfront costs while still financing their purchases.
Code of Conduct for BNPL in Singapore
The Singapore FinTech Association (SFA) has created a BNPL Code of Conduct in collaboration with the Monetary Authority of Singapore (MAS) and BNPL providers. This code is designed by these associations to guide BNPL providers in their interactions with customers. Its goal is to promote responsible lending practices.
BNPL Code aims to reduce the risk of consumers getting stuck into over-indebtedness. It also ensures that BNPL services positively benefit Singapore consumers. Important elements of the code include conducting credit assessments, implementing fair marketing practices, allowing voluntary discounts, and offering hardship repayment plans.
New BNPL providers are encouraged to adopt this code before starting their services in Singapore. Once they have completed the required audit and accreditation process, they can display the Trustmark to indicate compliance similar to existing providers.
Here is the list of Buy Now Pay Later Companies in Singapore.
Table of Contents
Afterpay
Afterpay is a payment option that allows customers to purchase items and pay for them in installments over time. Afterpay allows customers to split their payment into four interest-free bi-weekly installments and customers can either choose a 6 or 12-month longer payment plan that may include interest.
This payment method offers businesses more flexibility while allowing customers to receive full payment upfront. Afterpay also helps businesses attract new customers, as 30% of Afterpay users are new to the brand.
Afterpay service is free for customers if payments are made on time, and there are no hidden or annual fees either. Afterpay promotes a responsible spending framework for users by starting off with a low spending limit. As of October 2024, Afterpay is available in 260 e-commerce stores in Singapore.
Klarna
Klarna is a payment processing platform. It allows customers to shop both online and in-store using various payment methods. Klarna’s services are available in Singapore and offers several payment plans. Klarna provides many options for its users. The first option is a four-part, interest-free installment plan. In this option, the first payment is due at checkout and the remaining three payments are due over the next six weeks.
Another option allows customers to pay for a purchase in full within 30 days with no interest or fees if paid on time. Klarna provides a financing option with interest rates starting at 7.99% for larger purchases. Furthermore, Customers can also use the Klarna app to manage their accounts, track orders, view payment schedules, make payments, and access customer support.
Affirm
Affirm is a Buy Now Pay Later (BNPL) service that allows customers to pay for their purchases in installments. Affirm offers two main payment options. The first option is “Pay in 4,” which allows for interest-free payments made every two weeks. The second option includes monthly payments with interest, which can be spread over 3 to 48 months.
Affirm allows customers to select their BNPL service as their payment method at checkout. They can also use the Affirm app or online portal to view their transaction history, make payments, and adjust their payment plans.
Affirm uses tokenization, encryption, and fraud prevention tools to protect sensitive financial information. The service is designed to help merchants increase their average order value and to encourage repeat purchases. Affirm pays merchants the total amount upfront, while customers repay the loan over a set period. Currently, Affirm is available at thousands of stores in Singapore and is installed on six e-commerce platforms.
Sezzle
Sezzle is a Buy Now Pay Later (BNPL) platform. It allows consumers to split their payments into interest-free installments over time. It is available to Shopify merchants in Singapore.
Sezzle pays the merchant the full amount immediately when a consumer places an order. Consumers can later repay the purchase in installments over time. Sezzle give instant approval and does not affect a consumer’s credit score unless they choose to use Sezzle Up, which is a credit-building feature.
Service fees for Sezzle vary based on the purchase price and the specific Sezzle product, which range from $0 to $5.99. Additionally, Sezzle offers options such as a virtual card, pay-in-2, and long-term financing at checkout.
Atome
Atome Financial is part of Advance Intelligence Group. It is one of the largest independent technology startups based in Singapore. Atome is one of Southeast Asia’s leading digital consumer financing platforms. The name “Atome” stands for “Available to Me.” It offers flexible payment solutions for shoppers at popular online and offline retailers in various categories.
The range of categories includes fashion, beauty, lifestyle, travel, fitness and homeware. Atome is part of Atome Financial. It is a prominent fintech company that focuses on consumer finance and promotes financial inclusivity using AI technology.
Hoolah
Hoolah is Asia’s leading omni-channel Buy Now Pay Later (BNPL) platform. It helps merchants to address major challenges such as attracting new customers, encouraging repeat visits, improving conversion rates, and increasing basket sizes by promoting consumer affordability responsibly.
Consumers can enhance their lifestyles without worrying about high prices. Customers can purchase and pay the standing amount over a short period that aligns with their budgeting and salary cycles. Hoolah charges no interest and has no hidden costs. The company aims to create mutual value through responsible affordability.
Paypal
PayPal’s Buy Now Pay Later (BNPL) is a payment option that allows consumers to pay for purchases in installments. This service offers many features, which include strong security built on PayPal’s trusted platform. A merchant does not have to pay any additional costs when using PayPal’s Pay Later service. It significantly boosts conversion rates and increases cart sizes by up to 39%.
Additionally, many consumers tend to make follow-up purchases using PayPal’s BNPL option. About 50% of consumers make additional purchases within three months of their first transaction, and 70% do so within six months.
PayPal’s BNPL also includes automatic promotion of the most relevant payment option based on shopper behavior, access to a large user base, and immediate payment to merchants. The service is easy to set up and benefits from PayPal’s strong brand recognition and trust.
Grab PayLater
PayLater by Grab is a Buy Now Pay Later (BNPL) app available in Singapore. It allows users to make purchases in installments or pay in full the following month. It allows users to split their purchases into up to four interest-free monthly payments. The first payment is made at checkout, while the remaining payments are automatically deducted from the user’s GrabPay Wallet or linked card. Alternatively, users can choose to pay for their purchases in full the following month.
Users must be at least 18 years old and should be Grab users for at least six months to qualify for PayLater. The user should have a fully verified account and should use the latest version of the Grab app. Users can activate Pay Later by tapping on Finance and then selecting Enjoy Now and Pay Later under Explore GrabPay.
Zip Co
Zip Co is a global payments company that offers Buy Now Pay Later (BNPL) services. It has partnered with the Singtel Dash app to operate in Singapore. Zip Co allows customers to make online and in-store purchases by splitting their payments into four equal installments. Customers pay 25% at checkout and the remaining 75% in two weekly installments over six weeks.
The process works by tokenizing the customer’s debit or credit card, which means that payments are automatically withdrawn from their account. Customers receive notifications about upcoming payments and Zip Co also manages chargeback, fraud, and default risks.
Zip Co serves a variety of customers, including consumers, small to medium-sized merchants (SMEs), and businesses in sectors such as retail, education, health, and travel.
Splitit
Splitit is a payment processing company that provides installment plans for both customers and merchants. Splitit allows customers to divide their purchase costs into interest-free installments using their existing credit cards. There are no loans, credit checks, or additional fees involved.
It also allows customers to split their payments across multiple credit cards. Splitit enables merchants to offer installment plans to their customers, which can help increase conversion rates and foster customer loyalty.
Buy now pay later services are emerging in several countries and Singapore is also accepting it positively. Singapore has already made a framework to operate BNPL service providers to prevent fraud and exploitation of customers. Singapore’s BNPL sector is continuously evolving. It is coming up with different innovative ways to gain the trust of customers to escalate the growth of the sector.
Conclusion
Buy Now Pay Later (BNPL) services are emerging in many countries and Singapore is positively welcoming this trend. The country has already established a framework for BNPL service providers to prevent fraud and protect consumers. Singapore’s BNPL sector is continuously evolving and finding new ways to build customer trust, which is essential to drive growth in the industry.
