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The use of Buy Now Pay Later (BNPL) platforms is booming in the Kingdom and the UAE, with one in five consumers using the services to make purchases last year, according to Redseer Strategy Consultants. The increasing use of the alternative payment method in the region is led by homegrown BNPL players Tabby and Tamara along with UAE’s Cashew.
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Key drivers: The report attributed the growth in BNPL in both Saudi and UAE to widespread access to banking services and a tech-savvy population. It said that a notable gap in credit card penetration “has created an opportunity for BNPL players and hence its increased adoption in the region.” Rapid digital transformation, significant investment in tech and a shift towards digital payments is also driving the platforms’s growth in the two countries.
A near zero interest is luring in more: “There is mostly zero interest rate and no requirement of credit score,” the report said, with some BNPL platforms providing Shariah-compliant options, appealing to local consumers.
REMEMBER– Fintech accounted for 79% of MENA’s total venture debt-backed lending in 2023, owed in large to Tamara and Tabby, which together raked in USD 600 mn of the total USD 601 mn financing for fintech players.
