Buy Now, Pay Later Data Shows Continued Adoption in U.S. and Southeast Asia

As consumers went into lockdown with uncertainty at the center of changing lifestyles, flexible payment options, like buy now, pay later, or BNPL, skyrocketed in the e-commerce surge. According to new research from Kredvio and Katadata Insight Center, the BNPL boom was especially significant in Indonesia where e-commerce experienced major spikes in consumers who tried BNPL for the first time during the pandemic.

In fact, Kredvio, the buy now, pay later platform in Indonesia, found 55 percent of consumers in Indonesia tried BNPL for the first time in the last 12 months, compared to 81 percent in the U.S.

Moreover, the researchers said BNPL has the potential to become the preferred payment option in the country due to its convenience, security and speed. Of these consumers who have used BNPL, half said they plan to use it more frequently in the future.

While the report notes a significant spike in e-commerce occurring in 2019 even more growth occurred in 2020 alongside rising consumer confidence in digital transactions. Due to all shopping transitioning to online, authors of the report state there has also been an increase in the average transaction value consistently in almost all product categories.

At the same time, BNPL is being used in Indonesia for cash flow, with 41 percent of consumers saying they are using the flexible payment option to manage monthly expenses. Notably, there has been a significant increase in product categories such as household appliances, phone credit reloads and vouchers as well as food and other urgent needs.

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“The pandemic has dramatically changed our behaviors, including when transacting digitally,” said Indina Andamari, Kredivo’s vice president of marketing and communications.” The research conducted this year by Kredivo with the Katadata Insight Center reinforces our projection that e-commerce adoption will continue to increase every year. Besides increasing public trust in e-commerce, the pandemic has also encouraged people to switch to digital transactions.”

Notably, the BNPL consumer is “not just Gen Z and Millennials” in Indonesia. Rather the companies’ research found Generation X experienced an increase of transactions from 13 percent to 19 percent from 2019 to 2020.

“The pandemic has brought many changes in people’s daily lives,” said Bima Laga, general chairperson of the Indonesian e-commerce association, or idEA. “It is important to be able to understand the online consumer trends and behavior, not only for e-commerce industry players but also for digital service providers that support the e-commerce ecosystem such as the fintech industry.”

Further, when looking at the growth of BNPL in Indonesia alongside its growth in the U.S., Andamari said the impact of the pandemic has allowed its acceleration to become “the fast, easy and secure payment method of choice.”


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