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New data suggested that Buy Now Pay Later services are projected to grow in size in the Philippines by 2026 after the pandemic accelerated consumer adoption of cashless services, according to a report by Philippine Star.
Financial mobile app UnaCash made the claims in their latest research, asserting that BNPL transaction volume in the country’s e-commerce ecosystem could mushroom 568% to $2.5 billion by 2026. Data provided by the company showed that transaction volumes in 2021 amounted to an estimated $400 million.
BNPL is a type of financing, much like short-term loans, that allows consumers to make purchases and pay at a later date.
“The BNPL model is very promising and has unlimited potential. This payment method stimulates immediate purchases, thereby increasing both short-term and long-term company earnings,” UnaCash said in a statement on Wednesday.
The financial mobile app noted that BNPL, which they note could be applied to any product or service, came into vogue amid the pandemic, as contagion fears prompted many Filipinos to rely on cashless transactions for their daily needs.
“Before, the main demand was met by BNPL services (Billease and TendoPay) embedded in marketplaces (Lazada or Shopee). Nowadays, there are national and non-BNPL providers, such as Afterpay (Square), Paidy (PayPal), Cashalo, Plentina, Atome and others. Some of the big players are deemed so-called “super apps” - Grab, Gojek and Alipay,” UnaCash added.
This e-commerce segment’s growth potential could be supported by a growing user base. UnaCash projected that BNPL users could swell 236% from 5.2 million recorded last year to possibly 17.6 million by 2026.
UnaCash likewise attributed the sector’s growth prospects to several factors, including the country’s young population, swift adoption of technology by consumers and government support for digital businesses.
President Ferdinand Marcos Jr. is pushing for the digitalization of government services, among others, to stimulate economic growth.
“The Philippines does indeed have huge potential for growth of digital services, especially payment solutions, the demand for which is not going to decrease any time soon,” UnaCash said.