MUSCAT : Following the Central Bank of Oman’s approval of regulations governing BNPL service in the country, The Arabian Stories conducted an online research to assess market trends and its significance for consumers facing immediate cash constraints when making purchases.

It may be recalled that the Board of Governors of the Central Bank of Oman, earlier this month, took the decision to approve the regulations in keeping with global developments in various modern products and services that provide broader horizons for serving the financial sector customers in general.

Following this approval, several shopping destinations in the country, Muscat in particular, are reported to have initiated the service, making purchases easier on consumers. However, not everyone is aware of the choices available to them through the new service.

At the global level, BNPL service is gaining popularity as a convenient and flexible payment option for consumers, who can make immediate purchases and spread the cost over time – often with no interest or extra fees

What is Buy Now, Pay Later service?

Buy Now Pay Later service is designed to transform consumer finance with flexible payment options.
It is a popular short-term financing solution in the consumer loan space, allowing customers to make purchases and pay for them in equal installments at a later date without accruing interest. BNPL encompasses various business models, including apps for e-commerce and in-store use, physical cards for both online and offline transactions, and browser extensions that integrate BNPL into desktop shopping experiences.

Amidst limitations imposed on traditional financing and prevailing financial uncertainties, BNPL has proven to be a successful financing model, offering consumers quick access to credit without the hassles associated with traditional credit processes. This innovative approach streamlines the credit acquisition process, enhances the shopping experience with quick credit decisions, and supports the retail sector by encouraging increased consumer spending through interest-free advantages.

Key benefits of BNPL include improved shopping experiences with customized payment plans tailored to consumers’ financial positions, support for retail growth, and reduced paperwork and processing time associated with traditional credit applications.

BNPL’s installment-based approach, typically offering no interest charges, provides consumers with greater financial flexibility compared to traditional credit cards and personal loans. Moreover, BNPL loans generally do not impact credit scores unless payments are missed or delayed.

BNPL GCC Market Trends

In a report titled ‘GCC Buy Now Pay Later Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2023-2028’, IMARC Group, a leading market research firm, projected a robust growth rate (CAGR) of 23.6 percent during the forecast period.

The increasing popularity of online shopping, coupled with the rising preference for budgetary control and convenience among consumers, are key factors driving the adoption of Buy Now Pay Later (BNPL) services in the GCC region. This payment model allows consumers to make purchases upfront and defer payment over a specified period, making it an attractive option for spontaneous shopping.

Several trends are shaping the GCC BNPL market, including the increasing demand for seamless and flexible payment solutions, the rising adoption of BNPL to avoid credit card debt, and the integration of BNPL models in businesses to boost cart conversion rates. Additionally, the focus on building and maintaining consumer trust and the incorporation of effective risk assessment models to prevent default rates are driving market growth.

The report provides detailed insights into market segmentation based on channels (online and POS), organization size (large enterprises and SMEs), end-use industries (consumer electronics, fashion and garment, healthcare, leisure and entertainment, retail, among others), and purchase categories (small ticket items, mid-ticket items, and higher-priced items).

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