Square uses Clearpay to strengthen its position in the BNPL market

Square has just announced the integration of BNPL specialist ClearPay's offer into its own solutions in the UK. This is a way for the payment giant to add a new functionality expected by consumers to its financial offering and, above all, to complete its acquisition of the Afterpay group (Afterpay was indeed launching its offering in Europe under the Clearpay brand in March 2021).

FACTS

• Sellers using Square's solutions for physical or online sales in the UK will now also be able to offer Clearpay's split payment solution to their customers.

• Customers will be able to pay for their purchases in four interest-free instalments over a six-week period. Merchants are paid immediately.

• Clearpay is integrated as a payment option in the Square Online payment system and also in the Square Point of Sale, Square Appointments, Square for Retail and Square for Restaurants software.

CHALLENGES

• Relying on a strong partner: While Square has established itself over the years as a benchmark for alternative payment systems in Europe, the service is now relying on Clearpay to establish itself in the growing BNPL market. ClearPay, for its part, has achieved good results, with 20 million active customers worldwide for its payment solution. The latter also spend 40% more per transaction than non-users of its BNPL solution.

• Square has long been interested in the BNPL market and finally acquired Australian market specialist AfterPay last August. Today, the cashless giant has chosen to partner with a leading UK brand to establish itself a little more openly at the heart of this popular consumer offering.

MARKET PERSPECTIVE

• BNPL is now the fastest growing online payment method in the UK, accounting for nearly £13 billion of spend by 2021. It is expected to double in value by 2025 to account for 12.1% of the UK online retail market, or nearly £32 billion.

• While the UK government signalled its intention to impose stricter regulation on short term funding a few weeks ago, the growth of BNPL appears to be on track for now.