Pay Now Buy Later (PNBL) is an approach to personal finance where consumers only spend what they have – providing a much more sustainable financial foundation for households, parents, and younger generations.

The essence of PNBL is that consumers make upfront prepaid payments on digital top up cards so they can buy a product or asset in the future. This approach to spending is in stark contrast to the hugely popular Buy Now Pay Later (BNPL) payments options, which are highly accessible and can be controversial, as these companies make it easy to impulse buy and risk circumstantial debt. 

PNBL, on the other hand, gives consumers more control over their money management and better  financial visibility because they know exactly how much they earn and spend each month. This financial model, which allows consumers to make immediate payments for purchases with prepaid cards, offers an alternative to traditional credit and is reshaping how customers interact with e-commerce and retail services.

The appeal of PNBL can also be found in its simplicity. Prepaid cards have been around for years - and have controlled a significant market share in the global payments market,  by providing a vital service for budget conscious spenders and under-banked users. With a pre-determined balance, prepaid cards offer  a key spend management tool without the need for a bank account. It’s the low tech fintech that has been a lifeline for many people – and it shows no signs of slowing down- especially  in the Asia-Pacific (APAC) region.

The growing appeal of PNBL

PNBL's growth in the APAC region can be attributed to the unique blend of an expanding digital economy and evolving consumer preferences. Higher numbers of young millennials and Gen-Zs are digitally savvy and seek affordable, digitally enabled financial tools to complement their online and offline buying behaviours. Last year, APAC remained the world’s largest e-commerce market, with nearly US$4.2 trillion in total transaction value, a 41.5% increase from 2021.

Unlike traditional credit systems, PNBL offers a more flexible and accessible approach to purchasing, aligning well with the fast-paced, mobile-centric lifestyle prevalent in many APAC countries. The model has seen significant adoption in nations like China, South Korea, and Australia, where digital payments have already transformed the retail sector.

This trend indicates a broader shift in consumer finance, moving away from conventional credit cards and loans towards more immediate and transparent transaction methods. But when examining the trend, what are the various catalysts behind PNBL’s expansion?

APAC’s economic landscape

The APAC region is characterised by a rapidly emerging middle class. As a region it is predicted to see higher annual growth than all other regions during 2020-2025 due to rising disposable incomes in growing economies, including India and China. This demographic, increasingly engaged in online shopping, prefers straightforward and transparent financial transactions.

PNBL aligns perfectly with these preferences, offering a seamless payment experience without the complexities often associated with traditional credit systems. The burgeoning digital economy in APAC countries has created an environment where instant digital transactions are not just preferred but expected, paving the way for PNBL's integration into everyday commerce.

Technological innovation

In a booming fintech market, advanced digital payment systems and sophisticated fintech platforms have made PNBL services more accessible and user-friendly. The APAC fintech Market generated a revenue of USD 159 billion and is expected to have a CAGR of 16% over the next five years.

Such technological advancements have also enabled PNBL providers to offer more secure and efficient services, fostering greater consumer trust. The mobile-first approach in many APAC countries, where smartphones are the primary means of accessing the internet, has further accelerated the adoption of PNBL, making it a convenient option for on-the-go transactions.

A friendly regulatory environment

The supportive regulatory environment in the APAC region has significantly contributed to the growth of PNBL. In contrast to the traditional banking sector's stringent regulatory landscape, PNBL has thrived under more lenient conditions. This relaxed regulatory approach in countries like Japan, India, and Indonesia has facilitated innovation, allowing new services to emerge and cater to evolving consumer needs.

However, as the market matures, regulatory bodies are increasingly focusing on consumer protection and financial stability. Initiatives are underway to establish guidelines that balance innovation with risk management, ensuring that while new services continue to grow, they do so within a framework that safeguards consumer interests and promotes healthy financial practices.

The Pay Now Buy Later model has fundamentally altered the landscape of consumer finance in the APAC region. Due to its alignment with economic trends, technological advancements and regulatory environments, PNBL has introduced a new paradigm for retail and e-commerce payments. As the model continues to gain popularity, more consumers and businesses will have the opportunity to leverage the digital economy in a way that offers better budget control and greater financial sustainability for all.