BNPL hits the credit sweet spot by offering flexibility without the baggage. As adoption continues to grow, however, its risks become more prominent:
Nearly 60% of consumers say that they have spent more than they could afford because of BNPL
Ultimately, BNPL is a debt product that comes with the standard regrets and dangers. Overextension, delinquency/default, and fragmented payment obligations are still common experiences for BNPL’s engine of younger users. This, in turn, raises the risk that this group ends up on the same trajectory as their older, credit card-burdened counterparts – just repackaged in a more polished, modern form.
BNPL’s next chapter is one that will be built on smarter and more proactive design; embedded guardrails that educate and prevent overextension are brand differentiators that will help ensure a more sustainable model for providers and consumers.
This report looks at the following areas:
- BNPL adoption
- BNPL category usage and interest
- Reasons for using BNPL
- Average purchase price for BNPL usage
- Regrets using BNPL
- BNPL behaviors and attitudes
BNPL is evolving from a convenience tool into a core credit product, and its next chapter will test providers’ ability to adapt to shifting payment preferences and cash flow demands.
Amr Hamdi, Senior Analyst – Financial Services
Market Definitions
Buy now, pay later, or “BNPL”, is a form of short-term financing that allows consumers to make a purchase and pay for it over a series of fixed installments, often interest-free and without late fees depending on provider.
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EXECUTIVE SUMMARY
- What you need to know
- Credit card financing is finding a larger audience with young adults, but older generations have pulled back
- Graph 1: usage of BNPL through a credit card, by generation, 2023-25
- Reframe the BNPL proposition to resonate with young consumers
- Lower-earners are the most likely to have used BNPL for groceries – shifting its role as a tool for alleviating financial stress
- Graph 2: types of products or services bought through BNPL in the past year, by household income, 2025
- Providers must balance financing convenience and responsibility across essential spending
- Debit-linked BNPL can deepen loyalty with young customers and catalyze cross-sell opportunities
- Graph 3: attitudes toward bank BNPL, by generation, 2025
- Market predictions
- Opportunities
- The convenience of BNPL still comes at a cost
- Graph 4: spending behaviors using BNPL, by generation, 2025
- Embedded guardrails can help users make better-informed decisions
- Make education one with the user experience
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MARKET DYNAMICS
- Market context
- Market drivers
- Stable BNPL growth bodes well for sustained customer loyalty
- Graph 5: BNPL usage in the past year, 2025
- BNPL repayments are on course to reshape modern credit scoring
- Tariff-driven pressures will see BNPL act as a financial lifeline for vulnerable consumers
- Graph 6: headline CPI and core CPI, 2021-25
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CONSUMER INSIGHTS
- Consumer fast facts
- BNPL adoption
- BNPL is a young person’s game
- Graph 7: BNPL usage in the past year, by generation, 2025
- PayPal and pure-plays dominate the bulk of BNPL customer base
- Graph 8: usage of BNPL providers in the past year, 2025
- BNPL has different leaders for different generations
- Graph 9: usage of BNPL providers in the past year, by generation, 2025
- Credit card BNPL can help capture more super prime and prime business
- Graph 10: usage of BNPL providers in the past year, by self-reported credit score, 2025
- BNPL category usage and interest
- BNPL is moving beyond standard discretionary spending into essential expenses, raising the stakes
- Graph 11: types of products or services bought through BNPL in the past year, 2025
- BNPL can serve as a lifeline for medical costs
- Graph 12: interest in using BNPL for healthcare, by financial situation, 2025
- BNPL consideration enters the home
- Graph 13: interest in using BNPL for home improvement, by generation, 2025
- BNPL for travel finds steady appeal across young and old
- Graph 14: interest in using BNPL for travel, by generation, 2025
- Reasons for using BNPL
- Ease and control drive BNPL adoption
- BNPL’s appeal shifts with age
- Graph 15: reasons for using BNPL, by generation, 2025
- Subprime consumers look to BNPL as a safety net, heightening repayment risk
- Graph 16: reasons for using BNPL, by self-reported credit score, 2025
- Average purchase price for BNPL usage
- Issuers must position themselves as being the optimal choice for big-ticket spenders seeking both convenience and value on larger transactions
- Graph 17: average purchase price consumers would use BNPL for, 2021-25
- Big-ticket BNPL remains an area issuers can capture older business through
- Graph 18: average purchase price consumers would use BNPL for, by generation, 2025
- Regrets using BNPL
- Regrets about using BNPL are on the rise
- Graph 19: BNPL regrets, 2023-25
- BNPL regret is surprisingly not a symptom of financial strain
- Graph 20: BNPL regrets, by financial situation, 2025
- Payment friction and plan inflexibility are the main drivers of BNPL regret
- Graph 21: reasons for BNPL regrets, 2023-25
- BNPL behaviors and attitudes
- BNPL’s transparency has been critical in winning over the trust of young adults
- Graph 22: trust in BNPL providers vs credit card issuers, by generation, 2023-25
- Consumers’ proclivity to BNPL signals a future of more dynamic payment preferences
- Graph 23: attitudes toward BNPL versus credit cards, by generation, 2025
- BNPL is not overtaking credit cards anytime soon, but issuers can still take steps to ensure that their BNPL offerings become top-of-wallet
- Partnerships will define the next phase of growth for BNPL providers
- Graph 24: BNPL accessibility, by generation, 2025
- The saturation of the BNPL market necessitates greater differentiation through partnerships and broader financial products
- Graph 25: openness to signing up with multiple BNPL providers, by generation, 2025
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INNOVATION AND MARKETING STRATEGIES
- Marketing and advertising
- Amex leverages comparative advertising to highlight how it stands out from other BNPL providers
- Affirm’s Pay in 30 takes the flexibility of BNPL to newer heights
- Chase takes the fight to pure-plays with its debit-linked BNPL offering
- Klarna’s Apple Pay integration highlights the importance of embedded convenience in the BNPL race
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APPENDIX
- Market definition
- Consumer research questions
- Consumer research methodology
- Generations
- Abbreviations and terms
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