BNPL has seen a significant increase over the past 12 months in Việt Nam, with domestic BNPL payments expected to grow 137.3 per cent year-on-year to reach $491.3 million this year. Illustrative photo

HÀ NỘI — Deloitte and cloud banking platform Mambu have identified the five steps merchants and fintech firms need to embrace in building a successful Buy Now Pay Later (BNPL) offering.

This is part of a new report exploring the implications of the fast-growing sector for banks and retailers.

The ‘Deloitte and Mambu Guide to BNPL’ identifies five core building blocks for businesses looking to develop a BNPL solution in an increasingly competitive environment. They include: Value proposition; Technology and data; Risk and compliance, Skills and capabilities; and Go-to-market.

The report comes amid booming demand for BNPL services, with the market projected to be worth US$3.98 trillion by 2030 - growing at a CAGR of 45.7 per cent.

Consumer demand for convenience and affordability is one of three factors driving this growth according to the report, with recent data from Deloitte showing that more than half of consumers (56 per cent) cite the ability to test a product before making a payment as a key driver for using BNPL.

Other growth factors include widespread merchant adoption, as vendors look to reap BNPL benefits, such as increased sales conversions and average order sizes, as well as accelerated market traction during the pandemic. According to Worldpay data, BNPL accounted for 2.9 per cent of global e-commerce in 2020, and is expected to reach 5.3 per cent by 2025.

In the Vietnamese market, the fintech ecosystem is growing rapidly. BNPL has seen a significant increase over the past 12 months in Việt Nam, with domestic BNPL payments expected to grow 137.3 per cent year-on-year to reach $491.3 million this year. The sector as a whole is expected to grow 36.5 per cent annually. These projections are directly related to the increase in online shopping in Việt Nam. With over 8 million new consumers across digital channels, the e-commerce market has grown by 53 per cent in 2020.

Phạm Quang Minh, General Manager, Mambu Vietnam, said: “For businesses, offering BNPL services can help attract existing customers as well as gain new customers. BNPL also helps build consumer trust by enhancing the service experience and providing instant satisfaction for them.”

João Caldeira, Partner at Deloitte, added: “BNPL is now a key sales and conversion driver for retailers and ecommerce providers. Merchants, if they have not done so already, are looking around for an embedded finance solution that can help them design BNPL experiences at speed and at low-cost. The bottom line is that it’s a new revenue driver and having the ability to quickly add seamless installment-based payments at the point of decision can change a business.”  — VNS