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A second wave of mainstream BNPL startups takes the model to new markets – TechCrunch

Buy nowpay later (BNPL), estimated at a value $120 billion in 2021, has increased considerably in recent years. But for most of its rise to virtual checkout prominence, BNPL has largely targeted everyday consumer goods like clothing from Urban Outfitters or a Peloton. Now, the credit method goes beyond its e-commerce roots.

In recent months, large companies have joined the BNPL market, also hoping to quickly approve consumers for installment loans.

Established players like Mastercard and Visa have launched BNPL services through their respective credit cards; Mastercard too valued that $7.2 trillion in transaction value will occur through BNPL by 2025. Stripe also recently partnered with BNPL heavyweight Affirm to offer payment plans to any business on its platform.

But as several large financial services companies seek to integrate BNPL into everything, a new fleet of early-stage startups are looking to improve the strategy and offer tailored versions of BNPL for specific industries ranging from healthcare and custody. kids to groceries and even charitable donations.

While these services can help consumers access expensive necessities — in the case of medical bills or childcare — is it really a good idea for consumers to start paying even more in installments? ?

Kathleen Blum, vice president of buyer insights at C+R Research, isn’t so sure. The strategy has been proven to persuade consumers to spend beyond one’s means and has already prompted some users to debt.

“A lot of people who use buy now, pay later, demographically, tend to be a little less secure financially,” Blum told TechCrunch. “There really is no good credit check. Are they really aware? Do they understand the complications with some of that? »

This new fleet of startups, however, makes a compelling argument as to why they shouldn’t be thought of in the same way as the first wave of BNPL startups.