Europe 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

Regulation Reshapes BNPL Operating Models Across Markets

• Regulators in Europe are tightening oversight of BNPL, pushing products closer to formal consumer-credit rules. The EU’s Consumer Credit Directive II (CCD II), adopted in 2023 and entering into force in 2025-2026, brings BNPL arrangements under standardized disclosure and affordability rules.
• The UK FCA is progressing toward a supervised BNPL framework, with government consultation updates throughout 2024 setting expectations for credit-worthiness assessment and marketing compliance.
• France and Germany have already begun aligning industry practices proactively: French banks offering BNPL (e.g., Floa, Oney) have adjusted repayment-disclosure workflows; German providers such as Ratepay have integrated more structured documentation processes for invoices and instalments. The growing use of instalments across retail categories, especially electronics, home goods, and apparel, has prompted regulators to address consumer protection standards.
• Retailers across the UK, Germany and France are increasingly embedding BNPL at checkout, heightening scrutiny of affordability and advertising practices.
• Large fintech providers like Klarna and Clearpay have expanded into subscription and in-app payment flows, prompting alignment with broader consumer credit rules.
• BNPL will shift toward regulated credit frameworks in most European markets, increasing compliance-driven costs but improving provider stability. Providers with established risk processes, such as banks in France and Germany’s invoice-payment specialists, and UK card issuers, are likely to gain a relative advantage. Lighter-touch “pay-in-3” models may narrow as affordability checks become mandatory.

Banks Accelerate Entry Into BNPL Through Card-Linked and App-Based Instalments

• Banks across Europe are integrating BNPL into card and app ecosystems rather than competing via standalone BNPL products. In Spain, CaixaBank introduced instalment payments embedded directly into wallet services such as Apple Pay. In Italy, major issuers like Intesa Sanpaolo and UniCredit continue to expand card-linked instalment options for ecommerce and point-of-sale. In the UK, high-street banks including NatWest and Barclays have developed instalment-conversion features enabling customers to split existing card purchases.
• Banks want to defend card economics as fintech-led BNPL captures share in high-value retail categories. A mature credit underwriting infrastructure enables banks to offer instalment loans with regulated processes already in place. Merchants in the UK, Italy and Spain increasingly prefer multi-product payment partners, making bank BNPL attractive for integrated settlement and risk handling. Bank-led BNPL is expected to become a mainstream credit feature, especially in Southern Europe, where card usage is growing.
• Merchant adoption of non-bank BNPL may become more selective as banks bundle instalments with acquiring and settlement services. Fintech BNPL providers may respond by deepening their presence in niche verticals (fashion, travel) or by shifting toward platform partnerships.

Retailers Prioritise Checkout Integration, Driving BNPL Partnerships and White-Label Models

• Merchants in Europe are moving BNPL from optional “add-on” methods to fully embedded checkout flows, often supported by white-label or co-branded solutions. In Germany, large marketplaces such as Otto and MediaMarktSaturn use Ratepay for white-label invoice and instalment solutions directly within their interfaces.
• In France, retailers partner with Oney and Alma to incorporate instalment buttons at product pages, rather than only at checkout. In the Nordics, providers like Klarna continue to integrate loyalty and shopping tools inside retailer apps, supporting end-to-end purchase journeys. Retailers face pressure to reduce checkout abandonment, especially in markets with high invoice preference, such as Germany. Integrated BNPL reduces operational burden by consolidating settlement, fraud checks and reconciliation.
• BNPL providers are using partnerships to expand coverage as consumer acquisition costs rise. White-label BNPL will expand among large retailers looking to retain ownership of the checkout experience. Small and mid-size merchants may rely more on aggregator platforms (e.g., Adyen, Stripe, PayPal) to access multiple BNPL providers. Providers that can support a full-journey integration product page for returns will see stronger adoption.

Profitability Pressures Shift BNPL Toward Risk-Controlled and Subscription-Integrated Models

• BNPL providers across Europe are adjusting business models to focus on sustainable profitability. Klarna reported continued quarterly profitability through 2024-2025, driven by improved collections and cost discipline.
• Providers in France and Italy are reducing reliance on free instalments and promoting merchant-funded or interest-bearing plans. In the Nordics and the UK, providers have added subscription management and budgeting tools, integrating BNPL with broader financial services engagement.
• Rising funding costs across Europe have increased the cost of capital for BNPL receivables. Regulatory tightening requires stronger risk-management frameworks. Retailers are demanding more predictable economic models, pushing BNPL providers to revise fee structures.
• Profit-focused BNPL will shift toward selective underwriting, resulting in lower approval rates in higher-risk categories. Subscription-integrated BNPL (e.g., payments embedded within wallets or shopping apps) will expand, especially in Sweden, Finland and the UK. Providers may consolidate or partner more aggressively to strengthen balance-sheet capabilities.

Competitive Landscape

Current State of the Market

• Diverse national market structures and regulatory movements shape BNPL in Europe. In Sweden and Germany, invoice-based and instalment models remain widely used, supported by providers such as Klarna and Ratepay. In the UK, BNPL is concentrated among fintechs (Klarna, Clearpay, PayPal Pay in 3) alongside bank-issued instalment features.
• France and Spain continue to see BNPL driven by retailer-bank partnerships, especially through Oney and CaixaBank. Regulatory tightening through EU CCD II and UK FCA’s expected BNPL rules is influencing pricing, underwriting and onboarding models, increasing competitive barriers for smaller players.

Key Players and New Entrants

• Klarna maintains significant reach across the Nordics, Germany and the UK, while PayPal’s instalment product is present across most European markets. National players remain strong: Oney and Floa in France, Ratepay in Germany, Scalapay in Italy, and Zinia by Santander in Spain and Germany.
• New entrants include bank-linked instalment offerings such as NatWest’s UK instalment capability, CaixaBank’s Spain wallet-based instalments, and expanding merchant-acquirer BNPL from Adyen and Stripe. These entrants use existing customer bases to compete on embedded distribution rather than standalone BNPL apps.

Recent Launches, Mergers, and Acquisitions

• Across 2024-2025, consolidation and partnerships have shaped expansion strategies. Klarna has expanded deeper merchant integrations in the UK and Germany through partnerships with payment service providers. In Italy, Scalapay expanded retail collaborations across fashion an electronics chain.
• Banks across Spain and Italy have launched upgraded instalment features in their mobile banking apps. M&A activity remains selective but focused on credit-risk capabilities, such as providers acquiring collections and identity-verification technologies to comply with upcoming credit-assessment rules.

This is a bundled offering, combining the following 16 reports, covering 900+ tables and 1,300+ figures for the Buy Now Pay Later Market:

Report Scope

Europe 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

Europe 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

Europe 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

Europe Buy Now Pay Later Operational KPIs

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

Europe Buy Now Pay Later Spend Analysis by Business Model

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

Europe Buy Now Pay Later Spend Analysis by Purpose

• Convenience
• Credit

Europe Buy Now Pay Later Spend Analysis by Merchant Ecosystem

• Open Loop System
• Closed Loop System

Europe Buy Now Pay Later Spend Analysis by Distribution Model

• Standalone
• Banks & Payment Service Providers
• Marketplaces

Europe Buy Now Pay Later Spend Analysis by Channel

• Online Channel
• POS Channel

Europe 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

Europe 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

Europe 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 Europe'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 Europe: 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 Europe, 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.