The rise of “buy now, pay later” in SEA

The rise of “buy now, pay later” in SEA. Source: Grab

The rise of “buy now, pay later” in SEA

  • In Southeast Asia, “buy now, pay later” is becoming an increasingly popular way for shoppers to pay for purchases
  • Players including Grab, GoJek, Razer, Traveloka, Tokopedia, Alibaba, and others have all jumped at the opportunity
  • The uptake of the payment type across APAC has been fuelled by Gen Z and millennial shoppers

Recent world events have undoubtedly changed consumers’ behavior and reshaped the retail sector globally. The financial uncertainty caused by the pandemic has taught consumers to be more cautious with their spending habits. Due to that, many fintech companies seized the opportunity to implement buy now pay later (BNPL) solutions, replacing traditional financing options with more convenient, alternative payment methods. 

Moreover, out of the over 670 million people in the region, only 27% of the population have bank accounts. This sizable gap in traditional banking penetration has resulted in at least 438 million unbanked individuals, with no bank account, credit or debit card, or access to lines of credit in the Southeast Asian region. 

Players including Grab, GoJek, Razer, and Oriente have all jumped at the opportunity to fill this sizable and potentially lucrative gap. What makes BNPL enticing is that it allows customers to make purchases and pay them off over time in weekly, bi-weekly, or monthly installments. These products often come with appealing features including 0% interest, pay-in-installments, and ease of use.

Globally, BNPL is a booming market that’s set to grow from US$7.3 billion in 2019 to US$33.6 billion in 2027 at a compound annual growth rate (CAGR) of 21.2%, Coherent Market Insights estimates. In this timeframe, Asia Pacific is forecast to be the fastest-growing region owing to increasing Internet users. 40 million new users joined Southeast Asia’s digital economy in 2020 alone, bringing the total number of Internet users in the region to 400 million, according to the e-Conomy SEA Report 2020.

‘Buy now, pay later’ players 

Hoolah, a Singaporean BNPL solution provider for online e-commerce platforms, told Yahoo Finance Singapore in October 2020 that transaction volumes had increased sevenfold over the past six months as e-commerce boomed. The company added that the number of partnered retail stores jumped 280% to 1,000 between October 2019 and October 2020, showcasing that merchants are eagerly adopting BNPL options. Hoolah also operates in Singapore, Malaysia, and Hong Kong, and is now working towards expanding into other Asian markets.

Meanwhile, Singapore-headquartered e-hailing giant Grab has been providing a BNPL option since 2019. The PayLater solution is a payment method that allows customers to order Grab rides, GrabFood, GrabExpress and purchase from selected online merchants and make a single consolidated payment for them at the end of the month. Even GoJek, Grab’s biggest competitor, offers a similar product in its home country of Indonesia where other players like Kredivo and Traveloka have also been providing BNPL options. Kredivo specializes in BNPL while Traveloka is a Southeast Asia online travel company that launched its PayLater product in 2018, allowing customers to pay for their purchases in a period of one to 12 months.

Atome, another Singaporean BNPL player, reported in November 2020 that its 1,000+ merchants had seen a 20-30% increase in conversions, and as much as a 30% increase in average order size amid the pandemic. A subsidiary of, Atome launched its BNPL product in July 2020.

Razer Fintech, the fintech arm of Singaporean gaming hardware and software firm Razer, is amongst the latest players to join the BNPL craze, announcing a partnership with local BNPL service provider Rely on December 2020. Through the collaboration, Southeast Asian merchants registered under Razer’s business-to-business (B2B) solution, Razer Merchant Services (RMS), will be able to provide interest-free BNPL solutions to their customers.

Within the next couple of months, a new BNPL solution provided by Mastercard and Pine Labs will hit no less than five Southeast Asia markets, providing consumers with the flexibility of zero-interest installments on purchases. The “pay later” solution, which has been live in India and Malaysia, will be rolled out in Thailand and the Philippines in February, followed shortly by Vietnam, Singapore, and Indonesia, Mastercard said in December 2020.

Finally, in the Philippines, BNPL specialists include BillEase, Jungle, and TendoPay. Consumer lending mobile app Cashalo unveiled its PayLater product in 2019, announcing simultaneously a partnership with Cebu Pacific. Cashalo is a subsidiary of Hong Kong-based fintech company Oriente.