United States Buy Now Pay Later Business and Investment Opportunities Databook - 90+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q1 2026 Update

Key Trends and Drivers

See BNPL move into the mainstream while concentrating on financially stretched borrowers

• BNPL has shifted from a niche online option to a mainstream credit tool in the U.S. Roughly one-fifth of consumers with a credit record used BNPL in 2022, and usage has continued to rise, with a significant share of adults now having tried at least one service such as PayPal Pay in 4, Affirm, Afterpay or Klarna.
• Holiday 2025 data shows BNPL volumes continuing to grow: U.S. shoppers used BNPL for about $10.1 billion in spending between early November and Cyber Monday, up around 9% year on year, with Klarna, Affirm, Afterpay and PayPal prominent at checkout. Heavy users often hold multiple BNPL loans from multiple providers, making BNPL a recurring part of household cash flow management rather than a one-off convenience.
• Higher living costs and higher interest rates on revolving credit have pushed consumers toward short-term instalment plans with clear repayment schedules. CFPB analysis shows BNPL users are more likely to have subprime or deep-subprime credit scores and higher balances on other unsecured debt, indicating BNPL is filling a gap for consumers who find traditional credit more expensive or harder to access.
• Merchants across sectors, from electronics to groceries, are promoting BNPL at checkout, as seen in holiday spending patterns, where essentials such as groceries and health products feature prominently in BNPL purchases.
• This payment method is likely to remain embedded in U.S. consumer finance, but future growth will mostly come from repeat usage and new applications (bills, services, travel) rather than first-time adoption. Providers will face pressure to refine underwriting to reduce default risk, manage borrowers with multiple concurrent loans to avoid overextension, and coordinate more closely with credit-reporting frameworks to address regulatory concerns.
• Executives should treat BNPL as a key part of an unsecured-credit strategy, carefully monitoring overlaps with cards and personal loans, and specializing offers based on risk and customer profiles.

• In 2024, BNPL moved closer to the regulatory perimeter for traditional credit products after the CFPB issued an interpretive rule classifying BNPL lenders as “credit card” providers under the Truth in Lending Act and Regulation Z. The rule required BNPL firms to provide credit-card-style protections such as billing statements, dispute-investigation procedures and refunds for returned goods. A 2025 brief from the Federal Reserve Bank of Richmond highlights this shift. However, in early 2025, the CFPB announced that it would not enforce the interpretive rule and signalled its intention to revoke it, leaving the long-term regulatory status of BNPL under TILA/Reg Z uncertain.
• By early 2025, the policy stance shifted: legal and regulatory commentary reports that the CFPB announced plans to revoke its 2024 interpretive rule and stated that it would not prioritize enforcement actions based on that rule, even as it continued broader supervision of BNPL.
• In parallel, a separate CFPB rule to cap credit-card late fees at $8, seen as relevant to BNPL-card competition, was struck down by a federal court in April 2025. Rapid BNPL growth and evidence of heavy usage among borrowers already carrying substantial unsecured debt have kept BNPL on the policy agenda as a potential driver of financial stress.
• At the same time, political and legal pushback against broader CFPB initiatives has led to reevaluation of some rules, including those that would treat BNPL exactly like credit cards.
• Policymakers are trying to balance consumer protection (disclosures, dispute rights, fair treatment) with maintaining access to short-term, low-fee credit tools that many consumers rely on. Even if the 2024 interpretive rule is withdrawn, BNPL providers should expect ongoing supervisory attention, especially regarding dispute handling, fee practices, and the treatment of financially vulnerable borrowers.
• Credit-reporting and transparency standards for BNPL are likely to advance gradually, whether through formal rule changes, regulatory expectations, or industry efforts, leading to greater consistency. For providers and merchant partners, regulatory risk will increasingly focus on operational practices (complaint handling, hardship support, data usage) rather than whether this payment method is legally a 'credit card.' Firms that invest in robust compliance and clear customer journeys will be better positioned as the policy environment stabilizes.

• Major U.S. banks have expanded instalment and deferred-payment options on cards and through digital channels, seeking to reclaim spending that migrated to BNPL fintechs. A 2025 analysis notes that banks such as JPMorgan and Citigroup have rolled out or expanded BNPL-style options, including partnerships and instalment plans accessible via Apple Pay and proprietary platforms like Citi Pay.
• Big tech and digital wallets are reconfiguring their BNPL approach. Apple shut down Apple Pay Later in 2024 and shifted to a model where consumers access instalment loans from card issuers and lenders directly through Apple Pay, rather than Apple holding BNPL loans on its own balance sheet.
• Competition among dedicated BNPL providers remains intense. In 2025, Klarna secured an exclusive BNPL partnership with Walmart, displacing Affirm after several years and signalling how large merchants can materially shift provider market share. BNPL fintechs demonstrated strong merchant adoption and consumer engagement, prompting card issuers and banks to respond with instalment features to defend interchange revenue and customer relationships.
• Platform players see BNPL as one feature within broader wallets and super-apps, not a standalone business. Apple’s decision to rely on third-party lenders and banks’ expansion of card-linked instalments both reflect a shift toward embedded credit within existing payment rails. Funding needs are increasing as portfolios scale. Klarna recently entered a forward-flow arrangement with Elliott funds to offload up to $6.5 billion in loans over two years, while PayPal agreed to sell about $7 billion in U.S. “Pay in 4” receivables to funds managed by Blue Owl Capital, retaining customer-facing roles while shifting funding to private-credit investors.
• BNPL will increasingly operate on bank and payment network rails such as card-linked or wallet-based instalments alongside specialist providers, so differences between credit types will blur.
• Merchant bargaining power will remain high: large retailers and platforms will continue to switch providers or add alternatives, pushing down take-rates and favouring BNPL firms that can combine underwriting, funding, and flexible integration models. BNPL models that rely less on their own balance sheets and more on private credit funding will expand, reducing capital commitment but increasing exposure to market conditions. Executives must focus more on controlling acquisition, funding, and loss costs, as margins will likely shrink.

Extend BNPL from online retail into omnichannel and everyday services

• BNPL is moving deeper into day-to-day spending and omnichannel journeys. Holiday 2025 data show strong BNPL usage not only for discretionary goods but also for groceries, vitamins, skincare and other recurring purchases, indicating that consumers use BNPL to smooth essential outlays. Food-delivery and on-demand platforms are adding BNPL. In 2025, DoorDash announced a partnership with Klarna that lets U.S. users split eligible orders (including groceries and retail orders fulfilled via the app) into instalments, extending BNPL into high-frequency, low-ticket transactions.
• In-store and wallet-based instalments are scaling. Samsung Wallet introduced an installment feature for in-store purchases in 2025, allowing users in multiple U.S. states to split card-based transactions into a series of payments via Splitit without a new line of credit, with a nationwide rollout planned.
• For consumers, BNPL has become a budgeting tool rather than purely a way to afford large, occasional items. Weekly and monthly cash flow management is a central use case as households navigate rent, food, and other non-discretionary costs. Merchants and platforms see instalments as a lever to protect conversion and basket size in categories with high price sensitivity; this is especially evident in grocery, quick commerce, and mixed-basket retail via delivery apps. Wallet providers and card networks are competing to keep transactions within their ecosystems by embedding instalment options directly into the point of payment, whether online or in-store.
• BNPL exposure will tilt further toward everyday categories, increasing transaction frequency and spreading risk over more, smaller loans, but also making portfolio performance more sensitive to labour-market and income shocks. Providers will need more granular risk models that account for high-frequency usage, repeated small-ticket loans and cross-platform borrowing behaviour (e.g., the same customer using BNPL on a food-delivery app, a wallet and an ecommerce site).
• Merchants will likely treat BNPL as part of a broader omnichannel payment experience strategy, integrating it with loyalty, subscriptions, and promotions rather than treating it as a stand-alone add-on at checkout.

Competitive Landscape

Current State of the Market

• BNPL in the United States is defined by competition between specialist fintech providers, large payment platforms, and banks expanding instalment capabilities. Klarna, Affirm, Afterpay and PayPal remain widely integrated across ecommerce and marketplaces, while card issuers and digital wallets increasingly offer instalment features to retain spending within their ecosystems.
• Competitive intensity has risen as major retailers reassess provider partnerships, illustrated by Walmart’s shift away from Affirm toward Klarna in 2025, demonstrating that merchant decisions can materially influence market share. Wallet players and PSPs such as Apple Pay, Samsung Wallet and Stripe are shaping checkout availability, consolidating BNPL into broader payment-stack decisions.

Key Players and New Entrants

• Klarna, Affirm, PayPal and Afterpay remain central providers, supported by extensive merchant networks. Banks have strengthened their competitive role through card-linked instalment plans: JPMorgan, Citigroup and American Express now offer scheduling features that mirror BNPL’s repayment model.
• Apple repositioned its offering by discontinuing Apple Pay Later in 2024 and enabling bank-issued instalment loans within Apple Pay, shifting competition toward issuers integrated into the wallet. New entrants are limited, with competitive shifts stemming mainly from banks, private-credit partners, and embedded credit models rather than standalone BNPL startups.

Recent Launches, Mergers, and Acquisitions

• Recent activity shows providers reworking distribution and funding models. Klarna secured an exclusive BNPL partnership with Walmart in 2025, creating a large-scale retail channel for its instalment products.
• PayPal agreed to sell roughly US$7 billion of U.S. Pay-in-4 receivables to funds managed by Blue Owl Capital while retaining customer-facing functions, reflecting a shift toward balance-sheet-light models. Klarna also entered a forward-flow partnership with Elliott funds to offload a significant volume of loans, indicating rising use of private credit to support scale.

Report Scope

United States Retail Industry & Ecommerce Market Size and Forecast

• Retail Industry - Spend Value Trend Analysis
• Buy Now Pay Later Share of Retail Industry
• Ecommerce - Spend Value Trend Analysis
• Buy Now Pay Later Share of Ecommerce

United States Buy Now Pay Later Market Size and Industry Attractiveness

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis
• Market Share Analysis by Key Players

United States Buy Now Pay Later Revenue Analysis

• Buy Now Pay Later Revenues
• Buy Now Pay Later Share by Revenue Segments
• Buy Now Pay Later Revenue by Merchant Commission
• Buy Now Pay Later Revenue by Missed Payment Fee Revenue
• Buy Now Pay Later Revenue by Pay Now & Other Income

United States Buy Now Pay Later Operational KPIs

• Buy Now Pay Later Active Consumer Base
• Buy Now Pay Later Bad Debt

United States Buy Now Pay Later Spend Analysis by Business Model

• Two-Party Business Model
• Third-Party Business Model

United States Buy Now Pay Later Spend Analysis by Purpose

• Convenience
• Credit

United States Buy Now Pay Later Spend Analysis by Merchant Ecosystem

• Open Loop System
• Closed Loop System

United States Buy Now Pay Later Spend Analysis by Distribution Model

• Standalone
• Banks & Payment Service Providers
• Marketplaces

United States Buy Now Pay Later Spend Analysis by Channel

• Online Channel
• POS Channel

United States Buy Now Pay Later By End-Use Sector: Market Size and Forecast

• Retail Shopping
• Home Improvement
• Travel
• Media and Entertainment
• Services
• Automotive
• Health Care and Wellness
• Others

United States Buy Now Pay Later By Retail Product Category: Market Size and Forecast

• Apparel, Footwear & Accessories
• Consumer Electronics
• Toys, Kids, and Babies
• Jewelry
• Sporting Goods
• Entertainment & Gaming
• Other

United States Buy Now Pay Later Analysis by Consumer Attitude and Behaviour

• Spend Share by Age Group
• Spend Share by Default Rate by Age Group
• Spend Share by Income
• Gross Merchandise Value Share by Gender
• Adoption Rationale
• Spend by Monthly Expense Segments
• Average Number of Transactions per User Annually
• BNPL Users as a Percentage of Total Adult Population

Reasons to Buy

• Strategic and Innovation Insights: Gain clarity on the future direction of United States's Buy Now Pay Later market by analysing strategic initiatives, business model evolution, and innovation-led approaches adopted by key BNPL providers to strengthen market positioning.
• Comprehensive Understanding of BNPL Market Dynamics in United States: Assess market size, growth outlook, and structural shifts across retail and e-commerce, supported by detailed segmentation by channel, business model, distribution model, merchant ecosystem, end-use sector, and consumer demographics, underpinned by 90+ KPIs.
• Value and Volume-Based KPIs for Market Accuracy: Leverage a robust set of value and volume KPIs, including GMV, average transaction value, transaction volume, active users, revenue, and bad debt, to develop a precise understanding of BNPL adoption, usage intensity, and market maturity.
• Competitive Landscape Assessment: Obtain a clear snapshot of the BNPL competitive landscape in United States, including market share analysis of leading providers, enabling informed benchmarking and evaluation of market concentration and competitive intensity.
• Actionable Inputs for Market Entry and Expansion Strategies: Identify high-growth categories, priority end-use sectors, and distribution channels to fine-tune go-to-market and partnership strategies, while assessing key trends, regulatory considerations, and risk factors shaping the BNPL ecosystem.
• In-Depth Consumer Behaviour Analysis: Enhance ROI by understanding evolving consumer attitudes and spending behaviour, with insights into BNPL adoption drivers, usage frequency, income and age-based usage patterns, gender splits, and monthly expense segmentation.