Australian BNPL players are targeting established markets to expand their market share PayNXT360

Australian BNPL players are targeting established markets to expand their market share

The Australian BNPL market has become one of the most competitive markets globally. The presence of several big pureplay BNPL firms along with innovative startups and traditional banking institutions have propelled the growth of the sector over the last few quarters. With the growing consumer and merchant adoption in Australia, PayNXT360 believes investments to further increase in the BNPL sector over the next four to eight quarters.

Moreover, as the competition continues to grow in Australia, PayNXT360 expects more firms to expand their footprint in the international market to maintain sustainable growth over a longer period of time. For instance, in January 2022, Australian BNPL provider Zip Co Ltd announced that the company is going to acquire its rival firm, Minneapolis-based Sezzle Inc.

As per the company’s annual report, in 2021, Zip recorded significant growth with around US$5.8 billion in sales volume and acquiring approximately 7.3 million customers. Moreover, the company has a huge network of merchants worldwide which increased to almost more than 50,000 last year. While Sezzle, in its Q3 2021 report, mentioned that its US$1.6 billion sales volume and with more than 3.1 million customers, the company has expanded its network of merchants to around 44,400.

The acquisition will help Zip diversify and scale up its business in the United States and complement its business with an array of long-term financing partners. Notably, in the last two quarters, Zip had acquired rival firms to strengthen its position internationally. For instance,

In November 2021, Zip acquired Central European BNPL provider Twisto Payments to build its presence in the United Kingdom. Through this acquisition, Zip entered one of the world's largest e-commerce markets and access to the European Union (EU).
Similarly, in October 2021, Zip completed the acquisition of Middle East-based BNPL provider Spotii to grow its presence in the region.

However, the industry recently faced much scrutiny from regulators and credit-scoring companies. The gaining popularity of BNPL had caught the eyes of the regulators, and the Consumer Financial Protection Bureau (CFPB) had been questioning the BNPL firms to provide proper information on the risks and benefits of the payment. Most importantly, the piling of debts of the consumers is the point of concern of these regulators. In such a situation, the acquisition of Sezzle by Zip might offer the company agility to comply with future regulations.

To know more and gain a deeper understanding of BNPL in Australia, click here.