Deloitte and cloud banking platform Mambu have identified the five steps merchants and fintech firms need to embrace in building a successful Buy Now Pay Later (BNPL) offering.

This is part of a new report exploring the implications of the fast-growing sector for banks and retailers.

The ‘Deloitte and Mambu Guide to BNPL’ identifies five core building blocks for businesses looking to develop a BNPL solution in an increasingly competitive environment. They include: Value proposition; Technology and data; Risk and compliance, Skills and capabilities; and Go-to-market.

The report comes amid booming demand for BNPL services, with the market projected to be worth 3.98 trillion USD by 2030 - growing at a CAGR of 45.7 percent.

Consumer demand for convenience and affordability is one of three factors driving this growth according to the report, with recent data from Deloitte showing that more than half of consumers (56 percent) cite the ability to test a product before making a payment as a key driver for using BNPL.

Other growth factors include widespread merchant adoption, as vendors look to reap BNPL benefits, such as increased sales conversions and average order sizes, as well as accelerated market traction during the pandemic. According to Worldpay data, BNPL accounted for 2.9 percent of global e-commerce in 2020, and is expected to reach 5.3 percent by 2025.

In the Vietnamese market, the fintech ecosystem is growing rapidly. BNPL has seen a significant increase over the past 12 months in Vietnam, with domestic BNPL payments expected to grow 137.3 percent year-on-year to reach 491.3 million USD this year. The sector as a whole is expected to grow 36.5 per cent annually. These projections are directly related to the increase in online shopping in Vietnam. With over 8 million new consumers across digital channels, the e-commerce market has grown by 53 percent in 2020./.