European BNPL players are expanding their market through mergers and acquisitions

global Trends

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Changing consumer behavior and the continued rise of e-commerce are fueling flexible payment options such as buy now, pay later (BNPL) solutions, especially in Europe. Transition to digital payments had been long underway, even before the global pandemic outbreak. However, it has drastically accelerated customer preferences for using flexible payment solutions such as BNPL

European BNPL players are expanding their market through mergers and acquisitions

In Europe, many established and new BNPL players are involved in mergers and acquisitions to expand their presence and ease competition. For instance, in February 2020, Klarna acquired Italy-based buy now, pay later brand Moneymour to expand its services in the Italian market.

In similar M&A deals, Afterpay acquired Fintech firm Pagantis to expedite its expansion into the European market in August 2020. According to Afterpay, the European market is primed for BNPL services because of the growing e-commerce industry and large millennial population. Through this acquisition, Afterpay launched its BNPL services in France, Spain, and Italy, under its European brand Clearpay.

By launching its services in the European market, Afterpay rivals Klarna for a higher market share in Spain and Italy. In France, the BNPL provider competes with PayPal, which launched its buy now and pays later services in July 2020.

Mergers and acquisitions to increase in the Middle East BNPL sector

The e-commerce market is one of the fastest-growing industries in the Middle East; wherein online spending has increased at the rate of nearly 25% annually. Therefore, the Middle East region has become a lucrative investment opportunity for global buy now, pay later platforms, looking to expand their services globally.

In addition to its expansion in the European market, Zip also acquired Dubai-based buy now, pay later provider Spotti. Similar to Twisto, Zip owned 20% in Spotti through its initial investment in December 2020. According to the company, building on its initial investment, the global BNPL player will also acquire the remaining 80% in the Dubai-based flexible payment firm.