Akulaku PayLater: First BNPL in Southeast Asia to partner with China’s Alipay+
- The partnership will allow Indonesian consumers to use the Akulaku PayLater solution for global merchants on Alipay+.
- Akulaku reckon the partnership is a timely solution to meeting the increased demand from Indonesian consumers for online shopping.
Alibaba-owned payments app Alipay+ has included Indonesian Akulaku’s Buy Now Pay Later (BNPL) solution among its supported digital payment methods — the first in the former’s Southeast Asian foray. The partnership will allow Akulaku PayLater users to use its BNPL solution for all of Alipay+’s merchants globally.
That would also mean Alipay+ will start to include Akulaku PayLater among its supported digital payment methods, and its merchants will be able to access Akulaku PayLater as a payment method. Formerly known as Akucicil, Akulaku PayLater has been providing individuals who have limited credit history with access to a convenient line of credit as well as manageable installment plans, since 2016.
The Indonesian BNPL solution has been able to meet the increased demand for flexible payment plans and installment purchasing, and thus promotes consumer purchasing power. AkuLaku PayLater’s goal is also to ensure previously underserved markets are able to participate in a convenient digital financial service.
Data by market research firm eCommerceDB shows the Indonesian online commerce market grew 32% in 2021 and is currently the ninth largest in the world. Over the next five years, the Indonesian eCommerce market is projected to grow at a yearly rate of 10%, making this partnership a timely solution to meeting the increased demand from Indonesian consumers for online shopping.
Till date, there are more than 4,000 merchants in the Akulaku PayLater ecosystem and over the next two years, Akulaku aims to serve 10,000 online merchants and over 100,000 offline stores with its BNPL solutions. Moreover, according to an IDC InfoBrief commissioned by 2C2P, Indonesia is expected to welcome the largest number of new e-wallet users – 130 million – by 2025, which would translate into the archipelago to be the largest BNPL market in Southeast Asia.
By 2025 alone, the total BNPL spend on e-commerce in Indonesia is projected to increase 8.7 times compared to 2020. But Alipay+ and Akulaku is also exploring beyond Indonesia, with plans to further extend their partnership to other markets in Southeast Asia.
The BNPL payment scheme has been a highly attractive alternative to credit cards, especially considering how it does not require hard credit checks. Juniper Research in a recent report predicts that globally, BNPL users will surpass 900 million by 2027. The 157% growth expected in the next five years, from 360 million users this year, will be driven by the anticipated economic downturn, Juniper said, which will increase the demand for low-cost credit solutions.
When it comes to Southeast Asia, the region is particularly ripe for the growth of BNPL platforms considering how a large percentage of its population is also “unbanked” or “underbanked”. According to Bain & Company, more than 70% of adults in Southeast Asia, or roughly 450 million people, are either underbanked, have no bank account, credit or debit card, or access to lines of credit.
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