TAIPEI (TVBS News) — In recent years, Taiwan has seen a surge in popularity for the "buy now, pay later" (BNPL) payment method. This trend is driven by shifts in consumption habits and the growing number of solopreneurs and self-employed individuals across various industries.
According to data from the Directorate-General of Budget, Accounting, and Statistics (DGBAS), the number of non-typical employees in Taiwan exceeded 800,000 in 2019, representing 8.3% of the total employed population.
BNPL, which caters to a wide range of users including students, stay-at-home parents, and freelancers, is increasingly considered a norm in the realm of "atypical employment." This method offers significant financial flexibility compared to traditional payment options.
Kuan Hung-wen, a financial expert, highlights the rise in financial scams and credit card fraud. He points out that around 8 million people in Taiwan lack credit cards, making BNPL an attractive alternative.
The total user base for BNPL tripled in 2022 compared to the previous year, with the most significant growth observed in the 31 to 55 age group, who constitute 72% of BNPL users.
The three primary factors driving the popularity of BNPL are security, flexibility, and convenience. Hsieh Tzu-hsuan, a public relations representative from a BNPL company, explains the advantages of BNPL over traditional credit card payments.
One key difference lies in the application requirements, as BNPL is more accessible with a lower threshold. The other distinction is in the credit review mechanism, where an AI model is employed to quickly determine credit limits.
BNPL's rapid growth is not limited to Taiwan but is a global trend, projected to account for 12% of all e-commerce transactions by 2025, amounting to nearly NT＄22 trillion.
However, experts warn consumers to be mindful of potential risks associated with BNPL, such as overspending, repayment capabilities, and late fees.