Three Key Emerging Finance Trends for Pet Care

The pet care industry has been undergoing digital transformation. The global market value size of pet care is set to reach USD207 billion in 2025, presenting great opportunities to embed finance across the key phases in the customer journey. To unlock the market growth opportunities, pet care businesses can partner with finance vendors to optimise the customer journey experience. Key areas include data-driven personalisation, especially in digital insurance, payment diversification including digital wallets and buy now pay later (BNPL) to drive financial inclusion, and frictionless payment to reduce cart abandonment.

Insurances bridge initial gaps to acquisition

New pets can cost anywhere from under USD100 to over USD13,000, depending on the breed, age and source. Shelter adoptions often include vaccines, sterilisation, and microchipping – services that can rival the cost of buying a pet. To offset future medical expenses, some shelters and breeders partner with insurers. For instance, the Animal Humane Society in the US offers 30 days of MetLife coverage for adopted pets, helping address concerns over pre-existing conditions and incomplete health histories.

Housing adds another barrier. Homeowners’ insurance may restrict pet species, breed or size, risking coverage loss. To navigate this, pet owners increasingly turn to flexible insurers like Lemonade, which allow pet health and liability coverage to be bundled with renters’ or homeowners’ policies. Early insurance adoption and tailored coverage are key to managing the financial risks of pet ownership.

BNPL and loyalty solutions ease the financial burden during rearing

Pet ownership is becoming more expensive amid inflation, with global pet food average unit prices rising by 28% over 2020-2025. Beyond routine costs like food and grooming, unexpected vet bills and administrative fees strain budgets. To mitigate financial pressure, flexible payment solutions, including BNPL, are gaining traction.

The BNPL market surged from USD71 billion in 2019 to USD294 billion in 2024, offering pet owners interest-free instalment options

^{Source: Euromonitor International}

Brands like Royal Canin partner with Klarna to make premium pet food more accessible. Meanwhile, 42% of consumers now buy pet products online in 2025, creating opportunities for seamless BNPL integration. As pet care costs climb, innovative financing and loyalty programmes will be key to sustaining responsible ownership.

Finance platforms like Synchrony Bank’s Mastercard CareCredit card offer pet owners flexible financing and rewards, earning points on pet food purchases while accessing instalment plans. Partnering with Pets Best, the rewards programmes help manage rising pet care expenses, encouraging repeat spending while easing budget strain for pet parents.

AI and data-driven insurances to manage rising veterinary costs in healthcare

Driven by the pet population growth sustained from during the pandemic along with hybrid working lifestyle, the market value size of pet veterinary (for 10 key markets including the US, Japan and Indonesia) recorded USD52 billion in 2024, registering a 7% CAGR in 2019-2025. However, the main pain points for pet owners in the healthcare phase include the high expense of veterinary care and lack of access to emergency financing.

Without insurance, the annual healthcare expense for a dog or cat, including consultation, dental care, medication and vaccinations, typically ranges from USD500 to USD1,200 in Singapore. This also usually costs USD1,000-3,000 in the US.

Pet insurance mitigates bill shocks, covering accidents, death, and even cremation. Traditional providers, however, struggle with high premiums due to manual processes. Innovators like China’s Ping An use AI and alternative data to cut costs, while UK smart wearable brand, Tractive, leveraged GPS/health tracking from its one million users to launch competitive UK insurance in 2024. Digital solutions are key to making coverage accessible.

Opportunities in hyper-personalisation

The global market value size of pet care is projected to reach USD259 billion in 2029, with increasing market competition requiring hyper-personalisation to differentiate. 68% of pet owners consider pets as beloved members of the family in 2025. This, together with the diverse types of pets (cats, dogs, birds etc), suggests the importance of hyper-personalisation of financial products.

Backed by the breakthrough in AI and analytics, insurance agencies may establish closer partnerships with fintechs and veterinary care organisations to develop dynamic pricing, offering customised plans catering to each pet’s behaviours. Similar to Discovery’s vitality programme for humans, the more regular the daily exercise and sleep, and the healthier the diet and associated physiological signals, the lower the pet insurance premium should be.

For more insights on embedded finance, read our report, Embedded Finance Ecosystem: Mapping the Path to Services Industries’ Transformation.