‘Buy Now, Pay Later’: Banking on Global Financial Innovation

The new credit payment is the latest Fintech disruptor. Can established legacy banks adapt to keep up with the increased e-commerce demand and the red-hot tech services?
morganstanley.com – The latest Fintech sounds simple enough: Buy a product, take it home, set up payments after. However, the changes this innovation may bring to the financial sector are anything but. In fact, “buy now, pay later” (BNPL) platforms—adopted, so far, mainly by app-loving Millennials and Gen Z—are changing how people shop and spurring financial institutions to keep up.

BNPL is one of the fastest-growing e-commerce segments in Europe and Australia, and it is expanding across the U.S.

“We do expect BNPL to grow faster than traditional credit cards in Europe,” says Giulia Aurora Miotto, a Morgan Stanley European Equity Analyst. “And we think this adds up to the trend of Fintechs slowly ‘skimming the cream’ off different banks’ businesses in Europe.”

That means potential disruption for legacy financial services companies, which must compete to offer similar services to existing customers, while adapting to (and adopting) this type of retail-financing Fintech to grow their customer base. more>

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