BNPL Trending Among US MZ Generation... Naver and Coupang Also Taking Steps

[Asia Economy Reporter Kwon Jae-hee] The stock price of Affirm, a U.S. fintech company well known for its "Buy Now Pay Later" (BNPL) service, surged 18% on the 9th (local time). This followed the announcement that its fourth-quarter (third quarter in Korean standard) earnings increased by 71% compared to the same period last year. Affirm's earnings report clearly demonstrates the growth trend of the BNPL market. Interest in BNPL is also rising domestically, with movements underway to introduce the service.

According to CNBC on the 9th (local time), Affirm's fourth-quarter revenue was $261.8 million (approximately 306.6 billion KRW), marking a 71% growth compared to the same period last year. Following Affirm's strong performance, its stock price on the Nasdaq market surged by as much as 18%. The number of users also increased significantly. Affirm's user count in the fourth quarter reached 7.1 million, up by 1.5 million from 5.4 million in the third quarter.

Affirm is a fintech company founded by Max Levchin, co-founder of PayPal. Listed on Nasdaq in January this year, Affirm's market capitalization approaches approximately $25 billion (about 29.3 trillion KRW). Affirm provides BNPL services to companies and customers engaged in e-commerce. Recently, it has shown rapid expansion by partnering with major companies such as Amazon and Peloton.

The BNPL service offered by Affirm has gained great popularity recently as e-commerce has become routine due to COVID-19 and it appeals to the MZ generation. This is because MZ generation consumers with low credit scores or no income can make purchases without incurring debt by paying a certain fee. Australia's Afterpay, Sweden's Klarna, and Japan's Paidy are representative BNPL companies similar to Affirm.

As the BNPL market grows globally, mergers and acquisitions (M&A) within the industry are also active. Recently, Square, led by Jack Dorsey, acquired Australia's Afterpay for 33 trillion KRW, while U.S. online payment company PayPal announced it would acquire Japan's BNPL company Paidy for 3 trillion KRW. Bank of America forecasts that the BNPL market will expand 10 to 15 times by 2025.

With the BNPL market's remarkable growth, movements to introduce BNPL services have recently been underway domestically as well. A representative example is Coupang. Coupang has been providing the service under the name "Later Payment" since last year. It applies only to Rocket Delivery and Rocket Fresh products that Coupang directly purchases and sells within its platform. Naver has also swiftly moved to secure a position in the BNPL market. Since April this year, Naver has been offering post-payment services to some subscribers.

CNBC analyzed the growth background of the BNPL market, stating, "The number of young people looking for ways to purchase expensive products like computers or designer brands immediately without incurring debt is increasing."

This content was produced with the assistance of AI translation services.