Is PayPal’s entry into the already crowded BNPL space detrimental to the current leaders? History suggests not, as recognised by LiveWire Markets’ experts, including Tribeca’s Jun Bei Liu, who discusses what affect PayPal’s entry will have on Australia’s Buy Now, Pay Later sector.
According to Jun Bei:
PayPal has certainly had an impact on the share price of the sector. First of all, PayPal is a very large payment system and it’s certainly not something to be dismissed, but last year, PayPal released another version of Buy Now, Pay Later, but it didn’t quite work out. Now they have relaunched another one, which is at a significantly lower cost, and hopefully it can capture some of the market share.
If you take a step back, Buy Now, Pay Later is a very new industry. Afterpay only moved in 18 months or two years ago. The penetration of this service is very, very low. If anything, PayPal’s offering is going to drive more awareness and adoption of this service.
The large players who have already signed up a lot of retailers and have consumers using their platforms will be the ones who benefit. Yes, it is a threat, but it is just a demonstration of the proliferation of this space and it, in turn, will drive traffic back into the market leaders.