Buy Now Pay Later Explosion
HeyO,
I am sure you have heard of BNPL (Buy Now, Pay Later) services by now, heck you probably even used one-considering 1 in 3 Americans have (according to a Bankrate 2025 survey anyway).
BNPL started gaining traction in a big way I would say in 2022-2023, just as inflation and purchasing power, of course a new option to stretch money becomes popular. In the beginning and even up till 2024, it was pretty good gig though because most of its 0 interest if paid back in 6 weeks and non of them reported your usage to credit reporting agencies.
Well…
That is all about to change, we are expecting by the end of 2025 that ALL BNPL services will be reporting usage, balances etc to all CRAs. This could get really interesting for those who have multiple loans taken out through the same vendor/provider and how that will all show up on reports but I guess we will find out more later.
If you stop reading there, then you are good- you now know to be more mindful with your BNPL usage as its got more ramifications now, and well if you never used BNPL before, no real reason to start now as it will have very little benefit (at least it seems that way now) to improving credit score and its no longer ghosted so the “hack” is pretty much over.
Lets rewind a minute and nerd out on some data.
2023 and 2024 I would say is the years data started getting crazy on BNPL usage, so here is some data from that time frame.
There are currently around 360 million BNPL users. (according to Juniper Research)- Its estimated by 2027 there will be 900 million users worldwide, a 157% increase
The BNPL market is worth over $500 billion. ($532.9B). By 2030, BNPL is forecast to be worth $3.27 trillion.
16% of 18 to 34-year-olds use BNPL.
1 in 5 BNPL live in the US (currently 79 million US based BNPL users), that’s a 56.1% increase from 2023, and represented at the time 22% of all BNPL users.
User Demographics: Younger generations (Gen Z and Millennials) are more likely to use BNPL. By 2025, almost half of Gen Z are expected to use BNPL.
From 2022, Among borrowers ages 18-24, BNPL purchases made up 28% of total unsecured consumer debt compared to an average of 17% among borrowers of all age groups, during the months in which they borrowed.
Klarna has almost 150 million active users.
Clothing is the most popular BNPL purchase.
Almost half of US citizens are interested in BNPL services.
More than 60% of users had simultaneous loans, borrowers held higher balances on other credit lines, and most loans went to consumers with subprime or lower credit scores (From 2022, Approximately 63% of borrowers originated multiple simultaneous loans at some point during the year, and 33% took out loans from multiple BNPL lenders.)
And now lets fast forward to Q1 2025 data…
Now 1 in 3 Americans report using at least one BNPL service: 30% of U.S. adults say they have used at least one buy now, pay later service. PayPal Pay in 4/Pay Later (15%), Affirm (11%), Afterpay (9%) and Klarna (9%) are among the most widely used services.
About half of users experienced issues related to the service: 49% of users say they experienced at least one problem while using a BNPL service. Overspending (24%), missing payments (16%) and regretting a purchase (15%) are among the most common ones.
Spreading out cash flow is the main reason for BNPL usage: 57% of users chose this payment method to stretch their cash flow — more than any other reason. The appeal of low/no interest rates came in second at 40%.
Gen Zers are the most likely to have encountered issues: 66% of Gen Zers reported experiencing at least one issue while using BNPL — the largest percentage across generations.
BNPL usage was relatively consistent across all income levels: 31% of Americans in both the highest annual household income brackets and lowest brackets have used BNPL at least once.
In short, the honeymoon period with BNPL services is over as its about to graduate into a more mature sub-market of credit.
Till Next Time,
Wallet Monkey Guy
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