This is proven by seeing how the BNPL payment sector in Malaysia has grown rapidly over the previous four quarters, owing to growing e-commerce penetration and the impact of the economic downturn induced by the COVID-19 pandemic.
Is the BNPL wave here to stay in Malaysia? Keep reading to find out.
1. Rapid Digitalisation Rate
In Malaysia, small and medium businesses account for 98.5% of all businesses and majority of these businesses have to pivot in order to survive during the pandemic. Around one out of every three businesses have developed a digital strategy, and fewer than a quarter of those have a digital strategy team.
This demonstrates the enormous potential for digitalisation among the Malaysian businesses. With so much room for expansion, the BNPL wave is likely to follow suit.
As businesses become more digital, they will be able to tap into a larger market. BNPL services give businesses an extra competitive edge because of the benefits they may provide, such as greater conversion and bigger basket values.
Consumers will be able to make purchases and pay in instalments, allowing companies to stay afloat in the face of a slower and more uncertain economy.
Thanks to the win-win solution it provides, BNPL has a good possibility of becoming a favoured payment method for both consumers and retailers.
2. Change in Consumers’ Income in a Post-pandemic Environment
The pandemic has given a strong push for many companies to take their business online. With the pandemic likely to resurface following discoveries of new variants, companies have been reminded that digital marketing is one of their most valuable strategies.
From the consumers’ perspective, shopping from the comfort of one’s home is a much-welcomed alternative to going out. Even though the COVID-19 vaccination is now available, many customers may still be hesitant to incur excessive risks of catching the virus.
Furthermore, as customers get more familiar with e-commerce, they are discovering the benefits of buying online – no more battling traffic or paying parking fees at shopping malls.
During the pandemic, e-payments are becoming increasingly prevalent. People grow to appreciate how convenient e-payments are as they become more acquainted with them.
Similarly, as the e-commerce and e-payments industries expand, more individuals will become aware of the BNPL alternative. They will recognise the benefits when they begin to use it, which will contribute to the BNPL industry’s expansion.
BNPL is Transforming Malaysia’s Fintech Space
The trend has been a boon for many people trying to stretch their ringgit and avoid taking on extra long-term debt, which has been expedited by the pandemic and worsened by increasing economic challenges.
Malaysia is already riding on the new BNPL wave due to the rise of digital infrastructure, growth in the e-commerce industry, increasing online shoppers, rise in digital payments, convenience and affordability provided by the short term credit service, and is expected to continue to grow steadily in the nation as digitalisation becomes the norm.