Four pillars of BNPL growth for Filipino lenders

According to findings in the TransUnion 2024 Philippines Credit Perception Index (CPI) report, as the Philippine economy continues to evolve, the adoption of FinTech products has surged — with buy now, pay later (BNPL) services leading the way.

The report suggests that while forward-focused Filipino lenders have a unique opportunity to capitalize on this trend, those who ignore this shift risk losing market share to more innovative competitors, missing out on expanding their customer bases and seeing a decline in profitability and relevance.

To capitalise in an increasingly competitive market, a thorough understanding of emerging opportunities is critical. By focusing on the following four BNPL trends and actionable strategies, Filipino lenders can best position themselves to meet the evolving needs of their customers and support sustained growth.

Trend 1: Growing credit understanding

A majority (70%) of Filipinos exhibit a strong understanding of credit-related matters. Moreover, they have shown a considerable increase in interest in using and acquiring knowledge about credit products.

Strategy 1: Educate and empower customers

Lenders providing clear, accessible information about BNPL services can help Filipinos make better-informed decisions. Highlight the benefits of BNPL like interest-free periods and ease of use to encourage adoption.

Trend 2: Knowledge and favorability

While the general population possesses some knowledge about the concept of credit, there’s been a noticeable increase in expertise and favorability toward credit-based products. Adopting digital financial products has become more prevalent as many individuals embrace BNPL, virtual banks and credit cards. Additionally, there’s a growing interest in better understanding how to use credit cards positively among the population.

Strategy 2: Enhance knowledge and favorability

Offer targeted educational resources and communications that delve into the specific features and benefits of BNPL, virtual banks and credit cards. This can help increase product adoption and build long-term customer loyalty.

Trend 3: Positive perception of BNPL services

Similar to 2023 CPI study, BNPL services and instalment payments are associated with positive descriptors, such as being “helpful" and there’s been an increase in the number of people who associate credit cards with being “convenient." However, these trends remain hindered by ongoing stigma and reservations toward credit products.

Strategy 3: Address ongoing misconceptions and doubts

Highlight real-life success stories and case studies where BNPL has positively impacted users. Use these examples to help build trust and emphasize the practical benefits and security of BNPL services.

Trend 4: Safety and trust in digital financial products

Most Filipinos feel safest conducting transactions through traditional banks and e-wallets, with BNPL services and virtual banks closely following — indicating growing trust in digital financial products.

Strategy 4: Build and reinforce trust

Implement robust security measures and communicate these to your customers. Promote the safety and reliability of BNPL services through transparent practices and regular updates to enhance consumer confidence and drive greater adoption.

Equip consumers with the information they need to succeed

Filipino lenders can effectively leverage the rising BNPL trend by educating and empowering consumers. This helps your customers unlock the full potential of your BNPL offerings — driving financial inclusion and growth in the Philippine economy.