Mexico’s BNPL Sector to Surge 42.8% in 2024

Mexico's Buy Now, Pay Later (BNPL) sector is forecasted to continue its rapid growth, with an annual increase of 42.8%, reaching US$7.38 billion in 2024. According to Business Wire, a compound annual growth rate (CAGR) of 28.2% is anticipated from 2024 to 2029, propelling the BNPL gross merchandise value from US$5.16 billion in 2023 to US$25.56 billion by 2029. This surge is fueled by the expanding e-commerce landscape and rising consumer demand for flexible payment solutions.

The industry experienced a 31% surge in adoption throughout 2023, driven by consumers seeking seamless shopping experiences. Forecasts indicate a sustained annual growth rate of 30% over the next five years, highlighting substantial market potential and opportunities for industry stakeholders.

“A BNPL scheme benefits many,” says Alexander Wieland, Co-founder and COO, Aplazo in an interview with MBN. In Mexico, where 30% of adults lack financial products and credit history, BNPL serves as their first approved deferred payment instrument, with Aplazo boasting an approval rate ranging from 75% to 80%. “This contributes to establishing a credit history for users by reporting their responsible behavior to credit bureaus.”

The BNPL model has shifted the retail landscape by offering flexible payment options appealing to a wide demographic, particularly individuals aged 18 to 40. In 2023, the Mexican retail industry generated US$117 million in revenue, with BNPL contributing US$66 million, marking an 86% growth compared to the previous year, as reported by MBN. 

Business Wire’s analysis covers over 75 key performance indicators (KPIs), including market dynamics, consumer behavior, and future growth prospects. It also considers consumer attitudes, demographic trends, and sector-specific performance, enabling market players to devise targeted business strategies and capitalize on emerging opportunities in Mexico. 

Unlike traditional credit card payments, BNPL aids merchants in safeguarding their customers against fraud and chargebacks, notes Karen Herrera, PR and Editorial Manager, Kueski for MBN. “With the opportunity to pay over time without storing sensitive data online, unbanked consumers can make larger purchases while building their credit history at the same time.” 

BNPL is not exclusively used by the unbanked; it also appeals to members of the middle and upper class seeking “fast, safe, and convenient payment options with less stringent terms and lower interest rates than credit cards,” writes Herera. Despite holding credit cards, over 60% of Kueski's users opt for BNPL due to its novelty, convenience, and modern user-friendly features, considering it an extension of credit.