Despite challenges in previous years, Buy Now, Pay Later (BNPL) firms have made a significant comeback in 2023. After facing layoffs and devaluations, companies like Affirm, Sezzle, and Klarna have achieved consecutive profitable quarters. Notably, these profits haven't stemmed solely from their traditional BNPL transactions. Instead, they've diversified their revenue streams, with merchant services such as advertising playing a substantial role. Additionally, they've introduced subscription-based products offering various customer perks.
However, the BNPL sector still grapples with competing against traditional credit cards and has made controversial decisions like ending rewards programs and increasing interest rates. Public skepticism and criticism towards BNPL haven't been helpful either, potentially deterring consumers. Despite this, the industry's resilience and adaptability have allowed for a return to profitability, suggesting a cautiously optimistic future for BNPL firms.
Read the full article here.