Changing consumer behavior and the continued rise of e-commerce are fueling flexible payment options such as buy now, pay later (BNPL) solutions, especially in Europe. Transition to digital payments had been long underway, even before the global pandemic outbreak. However, it has drastically accelerated customer preferences for using flexible payment solutions such as BNPL. According to the Financial Conduct Authority in the UK, five million people have started using buy now and pay later platforms since the global pandemic. As a result, in the United Kingdom, the use of buy now, pay later platforms had almost quadrupled in 2020. Consequently, PayNXT360 expects that the growth in the flexible payment industry is likely to attract several global, big BNPL brands to the European market, leading to several mergers and acquisitions in the following quarters.

Mergers and acquisitions as a gateway to the largest e-commerce market

European Union countries represent the second largest e-commerce market in the world. With more than a US$1 trillion annual e-commerce market, major BNPL providers are looking at mergers and acquisitions as a gateway to one of the largest e-commerce industries.

For instance, in May 2021, Zip Co Limited, an Australia-based BNPL service provider, announced the acquisition of European BNPL provider Twisto. In January 2021, Zip invested €16 million in Twisto and will now be purchasing the remaining shares for an amount of €89 million. This acquisition of Twisto will provide Zip easy access to 27 European Union countries.

The buy now, pay later platform Twisto holds a European Payment Institution License. Therefore, subject to regulatory consents, Zip can now offer BNPL services across all EU member states. Moreover, the acquisition will enable Zip to compete with other major BNPL companies such as Klarna and Unzer (formerly Heidelpay) in the European market.

Twisto is one of the fastest-growing platforms in Europe. More than 1 million users have already transacted on the BNPL platform. Additionally, the buy now, pay later provider has more than 14,000 merchant partners available on its platform. Some of these merchant partners include Pizza Hut, New Balance, and Gap.

Study By PayNXT360

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