The new payment plan Buy-Now-Pay-Later (BNPL): But It’s Not All Glitz and Glam

What is Buy Now Pay Later?

Buy Now Pay Later (BNPL) is a short-term loan that allows consumers to make purchases and spread the cost over a future series of installments, usually weeks or months. The first installment is due at checkout, followed by equal payments period by period. While short-term BNPL products are typically interest-free, longer-term products may charge interest. BNPL’s use has expanded from online purchases to purchases in-store and has become popular in purchases involving electronics, fashion retail, furniture, and appliances. BNPL has even extended to services like travel and even health care.

There are various significant players in the industry—Affirm, Afterpay, Klarna, Sezzle, Zip (formerly QuadPay), Clearpay, Laybuy, and PayPal’s new BNPL model. Additionally, there are dozens more domestically and internationally.

BNPL is a highly convenient way to spread consumption costs, though, as it becomes more popular among Millennials and Gen Z shoppers, voices of concern are beginning to grow louder.

Growth in BNPL:

More and more people are opting to use BNPL services for their shopping each year. An estimated 15 million adults of all ages in the U.K. are actively using this form of credit, increasing by more than two million since the start of the year. Similarly, a 2021 report by Accenture showed BNPL users in the U.S. have increased by 300% since 2018, now reaching 45 million active users in 2021 and expected to reach 76 million by 2025. The vast majority of BNPL users across the globe are traditionally Millennials and Gen Z, although baby boomers are slowly adopting it. Additionally, the user base is predominantly assembled of lower-income consumers who may lack more traditional forms of credit. Rapid growth also resulted from the devastating economic effects of the COVID-19 pandemic. In these times of uncertainty, consumers could spread their costs (without interest) for products they would have otherwise been unable to purchase if required to pay in full at checkout. BNPL’s growth is undeniable, and it is estimated that by 2023, 3% of the global e-commerce revenue will come from BNPL.

BNPL Deals:

With the amount and magnitude of deals occurring in the BNPL industry, some people are dubbing BNPL as the ‘hottest business in payments.’ As you can imagine, payments companies are rushing to get in on the act. Although BNPL is fetching high multiples, most are choosing to buy instead of build. The fastest way to get a slice of the pie is via M&A. 2021 saw Block’s all stock purchase of AfterPay for $29 billion. Similarly, PayPal purchased Paidy in a $2.6 billion cash deal. Though, not all deals are megadeals. In 2021, 50% of all M&A activity in the payments industry revolved around BNPL. Evidently, no one wants to miss the boat on BNPL and the easiest way to get on is by way of acquisition.

Benefits to BNPL:

BNPL offers various benefits for consumers and merchants alike. For consumers, the primary benefit of BNPL is credit, especially for lower-income consumers with limited means. According to Ascent’s 2021 poll, 45% of U.S. adults who used BNPL said these products enabled them to make purchases that would not traditionally fit their budget. Additionally, BNPL offers a predetermined repayment schedule; consumers prefer the simplified repayment schedule set by the BNPL product instead of credit card debt, for which consumers must organize their repayment plan. Finally, consumers with little to no credit history can also use BNPL to build credit. BNPL providers have begun offering programs that allow users to submit their repayment history to credit bureaus to build their creditworthiness and improve their credit scores.

Similarly, merchants who have adopted BNPL as a payment option have experienced several benefits. Reports from two industry leaders, Klarna and Affirm, indicate that merchants who adopt this payment option have encountered less cart abandonment and a 20% repeat purchase rate. The prearranged and fixed amount installments have also made goods and services more obtainable to the consumer, increasing their propensities to consume, thus increasing the average transaction values of their shop. Additionally, merchants often face exposure to chargebacks and fraud risks. However, by implementing BNPL products, the merchant no longer bears the risk, and the BNPL firm assumes all uncertainty. Lastly, merchants can gain a competitive advantage as more consumers are attracted to those offering these BNPL payment plans.

Concerns with BNPL:

High growth and lack of regulation have raised some concerns, particularly about users spending more than they can afford. Due to lack of regulation in the U.K. and U.S. alike, BNPL firms bear no responsibility to run complete affordability assessment checks on customers. As a result of the incomplete credit checks, also known as ‘soft credit checks,’ consumers can accumulate debt across multiple lenders and risk 'financial overextension.’ The BNPL companies would be unaware of further exposure. The availability of BNPL can also encourage impulse buying. Klarna and Affirm estimate that those who spread costs with BNPL raise their order value by 81% compared to those who pay upfront. These purchases can be challenging to manage when purchasing through various BNPL products. In addition, the use of multiple products can often result in late and missed payments leading to interest accrual on the outstanding credit. Although the user base is growing, the millennial and Gen Z demographic is specifically at risk. Younger consumers’ ability to access credit in the future or employment prospects may be adversely affected by their financial troubles with BNPL today.

Additionally, while BNPL does benefit merchants, they also bear the consequences of the implementation of BNPL. Typical credit or debit card transactions cost 1 to 3 percent of the transaction value. That cost pales compared to a BNPL transaction which varies from 1.5 to 7 percent of the total transaction value. By merchants offering to accept these interest-free payment products, they risk losing purchasing products like debit or prepaid cards, which cost them less to accept. This could lead to the cost of purchasing products with BNPL outweighing the value in the long term. In addition, merchants must consider whether BNPL products fit what they are selling and may have to implement a minimum transaction value to avoid losing money. Another disastrous situation arises for merchants in the event of returned or damaged products. While merchants benefit from realizing fewer returns from users paying with BNPL, the process can be arduous in returning money to the correct party when the situation arises.

Conclusion:

BNPL’s growth is undeniable as it is increasingly offered by merchants and used by consumers. While it benefits consumers and merchants alike, it also comes with many concerns and uncertainty. Regulation may need to be enacted to better protect the consumer and make them aware of the financial risk they bear by employing BNPL products. Additionally, merchants must carefully weigh the costs versus benefits of offering these payments options as regulation seldom intervenes in this regard.

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Copy of Bilt Rewards Acquires Banyan to Enhance Loyalty Program

By Lane Gordon • April 30, 2025

In a strategic move announced on March 13, 2025, Bilt Rewards, a leading payments and commerce platform, acquired Banyan, a prominent provider of item-level receipt data solutions. This acquisition marks Bilt's inaugural venture into mergers and acquisitions, signaling a significant expansion of its capabilities in the fintech and loyalty rewards sectors. Overview of Bilt Rewards Founded in 2022, Bilt Rewards has rapidly established itself as a transformative force in the housing payments market. By converting rent and mortgage payments into valuable rewards, Bilt offers residents a unique opportunity to earn points on their largest monthly expense. These points can be redeemed for a variety of benefits, including travel, fitness classes, and even contributions toward a future home purchase. As of August 2024, Bilt was valued at $3.25 billion following a $150 million capital injection led by Teachers’ Venture Growth. Introduction to Banyan Banyan, founded in 2019 and based in Holmdel, New Jersey, specializes in providing item-level receipt data, offering unprecedented insights into consumer purchasing behavior. The company's technology has processed over $200 billion in gross merchandise value and analyzed more than 20 billion receipts. This extensive data repository enables merchants to create targeted, relevant, and valuable customer experiences. Strategic Rationale Behind the Acquisition The acquisition of Banyan aligns with Bilt Rewards' mission to enhance neighborhood commerce by leveraging detailed transaction data. By integrating Banyan's item-level receipt data into its platform, Bilt aims to offer more personalized rewards and automated benefits to its users, thereby fostering stronger connections between residents and local merchants. Key Benefits and Innovations Enhanced Personalization: With access to granular purchase data, Bilt can tailor rewards based on users' specific buying habits, enhancing the overall customer experience. Automated FSA/HSA Savings: Expanding upon its existing Flexible Spending Account (FSA) and Health Savings Account (HSA) programs, Bilt will automatically identify eligible purchases and file for reimbursements, potentially saving members up to 40% on qualifying items without any additional effort. New Resident Welcome Experiences: Neighborhood merchants can offer personalized rewards on home essentials when Bilt members move into a new area, helping establish shopping routines that benefit local businesses. Brand-Powered Rewards: Consumer packaged goods companies can provide targeted rewards when residents purchase specific products at neighborhood merchants, creating mutually beneficial scenarios for brands, local businesses, and residents. Cross-Merchant Experiences: Banyan's data enables the creation of seamless experiences across merchants, such as complimentary rides to neighborhood restaurants triggered by specific food purchases, or validated parking at local retail based on purchase categories and amounts. Expansion into New Merchant Categories The acquisition accelerates Bilt's expansion into new merchant categories beyond dining, fitness, and pharmacy to include grocery, gas, parking, and more. This comprehensive neighborhood commerce network allows partner merchants to gain unprecedented visibility into neighborhood spending patterns and reach residents with precisely targeted offers, potentially achieving returns on investment that are 20 to 60 times the industry average. Leadership and Operational Structure Post-Acquisition Following the acquisition, Banyan will continue to operate independently under the leadership of its CEO, Jehan Luth. The company will collaborate closely with Bilt to enhance the neighborhood commerce ecosystem, maintaining existing client relationships and services while expanding its capabilities through Bilt's network. Industry Implications This acquisition underscores a broader trend in the fintech and loyalty program sectors, where companies are increasingly leveraging data analytics to enhance customer engagement and drive business growth. By harnessing detailed transaction data, Bilt Rewards is positioned to deliver a more engaging and rewarding experience for its users, setting a precedent for other companies in the industry to consider similar strategic moves. Conclusion The acquisition of Banyan by Bilt Rewards represents a significant advancement in the fintech and loyalty program industries. By integrating item-level receipt data, Bilt can offer more personalized rewards and automated benefits, enhancing the overall customer experience. This strategic move not only benefits Bilt's users but also sets a precedent for other companies in the industry to consider similar data-driven strategies to drive innovation and growth. About 733Park At 733Park, we specialize in facilitating strategic acquisitions in the fintech sector, connecting visionary companies to drive innovation and growth. Our expertise in payments, fintech, and SaaS mergers and acquisitions positions us to guide both buyers and sellers through complex transactions. If you're a founder seeking to maximize your company's value or an investor looking for strategic opportunities, let's connect to explore how we can achieve your objectives together. #Fintech #MergersAndAcquisitions #LoyaltyPrograms #DataIntegration #733Park

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Bilt Rewards Acquires Banyan to Enhance Loyalty Program

By Lane • March 20, 2025

733Park is an M&A firm specializing in payments, fintech and SaaS mergers and acquisitions, deal sourcing, merchant portfolios, ISO and advisory services.

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MoonPay acquires Iron (Stablecoin Payments Infrastructure)

By Lane • March 20, 2025

MoonPay , the prominent Miami-based crypto payment fintech, announced its acquisition of Iron , a cutting-edge German startup specializing in stablecoin payment infrastructure. This marks MoonPay's second significant acquisition of the year, following its earlier purchase of Helio for $175 million. The strategic acquisition solidifies MoonPay’s position as a formidable player in the global fintech space, especially in the growing niche of stablecoin-based payment solutions. MoonPay’s Vision for a Crypto-Enabled Future Founded in 2019 and led by visionary CEO Ivan Soto-Wright, MoonPay rapidly ascended the fintech ranks with its intuitive platform enabling seamless crypto transactions. Currently supporting over 170 cryptocurrencies across more than 180 countries, MoonPay is recognized for simplifying digital asset transactions, significantly lowering barriers for enterprises and retail customers alike. MoonPay’s acquisition strategy clearly highlights its objective of expanding into comprehensive, enterprise-level crypto payment solutions. The purchase of Iron, a company established only in 2024, underscores MoonPay's swift response to emerging fintech trends, particularly the surging demand for stablecoin infrastructure within payment ecosystems. Iron: Revolutionizing Stablecoin Payments Iron entered the fintech scene with the promise of delivering stablecoin payment solutions through highly adaptable APIs. The German startup quickly gained traction by enabling fintech firms, marketplaces, and merchants to seamlessly integrate stablecoin payment capabilities directly into their platforms. Iron's robust API solutions enable clients to embed stablecoin payments, open virtual stablecoin accounts, and manage multi-currency treasuries efficiently. The primary attraction of Iron’s technology lies in its simplicity, scalability, and instantaneous payment processing capability. By harnessing stablecoin technology, Iron empowers businesses to conduct instant cross-border transactions, sidestep costly traditional banking intermediaries, and simplify international treasury management. Strategic Synergies of the Acquisition The strategic rationale behind MoonPay’s acquisition of Iron is multifaceted. Most significantly, it positions MoonPay to capitalize on two critical fintech market shifts: 1. Rapid Adoption of StablecoinsStablecoins, cryptocurrencies pegged to stable assets like fiat currencies, offer the benefits of crypto (speed, security, transparency) without the volatility that hampers mainstream adoption. Businesses globally are increasingly adopting stablecoin infrastructure to enable frictionless, instantaneous, and affordable transactions, making Iron's API-driven solutions extremely attractive. 2. Enterprise-Level Crypto Payment SolutionsWith Iron’s technology integrated, MoonPay can now offer enterprises more robust treasury management and broader payment solutions. By bridging the gap between traditional finance and crypto payments, MoonPay further entrenches itself as a market leader, enabling large fintech organizations and international merchants to efficiently navigate global markets. MoonPay CEO Ivan Soto-Wright highlighted the impact of this acquisition, stating, “With Iron’s technology, we’re putting programmable payments into enterprises' hands, marking a significant leap toward modernizing global finance through crypto infrastructure.” Real-World Benefits for Businesses MoonPay's expanded capabilities through Iron’s acquisition mean tangible, real-world benefits for global businesses, including: Instant Transactions: Iron’s stablecoin infrastructure enables instantaneous settlement, significantly improving cash flow management for businesses operating internationally. Reduced Costs: Businesses can bypass traditional banking intermediaries and substantially reduce transaction fees, offering better margins and competitive pricing. Enhanced Security and Transparency: Blockchain-based stablecoin transactions ensure transparent, secure, and tamper-proof payment records, increasing trust and reducing fraud. Simplified Treasury Management: Iron's technology helps businesses effortlessly manage multi-currency treasuries, allowing them to efficiently allocate and transfer resources across global operations. Market Implications: The Shift Towards Stablecoins MoonPay’s acquisition of Iron signals an industry-wide shift towards stablecoin adoption within fintech. The integration of crypto payment infrastructure is no longer a niche or experimental option—it’s quickly becoming standard practice for global fintech operations. At 733Park , we’ve closely monitored fintech evolution, recognizing stablecoin payment infrastructure as the logical progression in financial technology. Companies capable of facilitating reliable, cost-effective cross-border transactions using stablecoins are likely to dominate future fintech ecosystems. MoonPay’s move demonstrates proactive alignment with this emerging reality. 733Park Insights: M&A Trends in Fintech and Crypto As a specialized M&A advisor focused on fintech, SaaS, AI, and payments, 733Park routinely identifies and facilitates transformative acquisitions like MoonPay’s purchase of Iron. We've observed increasing consolidation in crypto-related fintech as industry leaders seek to swiftly integrate innovative technology rather than develop solutions in-house. This acquisition exemplifies a broader trend: established fintech players rapidly expanding through strategic M&A to strengthen their competitive advantage and rapidly adapt to market shifts. At 733Park, we frequently advise clients—ranging from ambitious startups to seasoned private equity groups—on effectively navigating these dynamic landscapes, either via strategic exits or through acquisition-led growth. As our witty team at 733Park often says, “Stablecoins are becoming fintech’s most reliable currency—literally.” And in the realm of fintech M&A, reliability and swift adaptation define success. Conclusion: Paving the Way Forward MoonPay’s acquisition of Iron represents more than just a strategic business decision; it’s indicative of the broader trajectory within fintech toward comprehensive crypto integration. By proactively enhancing its stablecoin capabilities, MoonPay positions itself at the forefront of fintech innovation, offering robust solutions that meet evolving global demands. This acquisition not only bolsters MoonPay’s service suite but also serves as a valuable blueprint for fintech companies looking to capitalize on emerging trends. Businesses and investors alike should closely watch this space, as stablecoin payment solutions rapidly transition from innovation to necessity. At 733Park, we're enthusiastic about the potential of stablecoins and crypto infrastructure to fundamentally reshape fintech. With deals like MoonPay’s acquisition of Iron, the future is certainly stable—and exciting. For inquiries about strategic M&A initiatives, especially within fintech, payments, SaaS, and AI, contact our expert team at 733Park. #Fintech #CryptoPayments #Stablecoins #MergersAndAcquisitions #733Park