The fastest-growing way to pay
Buy now pay later, usually shortened to BNPL, lets shoppers take a product home today and pay for it in instalments, most often four equal payments spread over six weeks with no interest. What began as a niche option on fashion websites has become one of the fastest-growing payment methods in the world, offered at the checkout of millions of online and physical stores and used by hundreds of millions of people.
The appeal is simple. For shoppers, BNPL spreads the cost of a purchase without the interest charges of a credit card, and often without a hard credit check. For merchants, it tends to lift sales and the size of the average basket. For the providers in the middle, it opened a lucrative new business that challenged the dominance of the card networks, a shift explored in our overview of fintech statistics and facts. But as BNPL has spread from designer trainers to weekly groceries, concerns have grown about late payments, stacked loans and consumers borrowing more than they can manage. This report brings the data together.
How big the market is
The value of purchases paid through buy now pay later has grown rapidly and is still rising. The chart shows global BNPL payment value, with a forecast to 2030.
Over half a trillion dollars: global BNPL payments rose to about 560 billion US dollars in 2025 and are forecast to reach about 912 billion by 2030.
Global BNPL payment value reached about 492.8 billion US dollars in 2024 and roughly 560.1 billion in 2025, growth of about 13.7 percent in a single year. Between 2021 and 2024 the market expanded at an average of around 21.7 percent a year as the pandemic pushed shopping online and BNPL buttons spread across checkouts. Growth is now expected to slow to about 10 percent a year, taking the market to roughly 912 billion dollars by 2030. That slowdown reflects a maturing industry: the easy gains from signing up new merchants are fading, higher interest rates have raised the cost of funding interest-free loans, and regulators are tightening the rules. Even so, BNPL remains one of the fastest-growing corners of consumer finance, and its growth has tracked the broader expansion of online retail covered in our report on retail e-commerce sales growth worldwide.
How buy now pay later works
At its core, a BNPL transaction is a small, short-term loan. When a shopper chooses BNPL at checkout, the provider pays the merchant the full price, minus a fee, almost immediately. The shopper then repays the provider over time. The most common product is pay in four, where the price is split into four equal instalments, the first paid at purchase and the rest every two weeks. Because these loans are usually interest-free, the provider makes most of its money not from the shopper but from the merchant.
Merchant fees are the engine of the business. Retailers typically pay BNPL providers a fee of several percent of each sale, generally more than they pay to accept a credit card. They accept that higher cost because BNPL tends to bring in more customers and bigger baskets. Providers also earn late fees in some markets, and increasingly offer longer-term loans, lasting months or even years, that do carry interest, much like a traditional instalment loan. This blend of interest-free short loans and interest-bearing long ones is what makes the modern BNPL provider look less like a payment button and more like a bank, a transition visible across the digital challenger banks reshaping consumer finance.
For consumers, the key difference from a credit card is structure. A credit card offers a revolving line of credit with interest charged on unpaid balances, often above 20 percent a year. A pay-in-four BNPL loan has a fixed schedule and no interest if paid on time. That clarity is a large part of its appeal, especially to younger shoppers wary of card debt. But the ease of taking out several loans at once, with different providers, can make it hard to keep track of what is owed, which is where the risks begin.
Where BNPL is most popular
BNPL adoption varies enormously between countries. The chart shows its share of e-commerce payment value in a range of markets.
A Northern European habit: BNPL accounts for around a quarter of online payment value in Sweden and a fifth in the Netherlands and Germany, against about one percent in China and India.
BNPL is most deeply embedded in Northern Europe. In Sweden it accounts for around 24 percent of e-commerce payment value, and in the Netherlands and Germany about 21 and 20 percent. Part of the reason is history: shoppers in these countries have long been used to paying by invoice after delivery, a habit that Klarna, founded in Stockholm, turned into a global business. Australia and New Zealand, where Afterpay was born, follow at about 13 percent. In the United States BNPL is growing fast but still makes up only about 6 percent of online spending, close to the global average of around 5 percent.
At the other end of the scale, BNPL barely registers in China and India, at about one percent of e-commerce value each. That is not because shoppers there avoid credit, but because other tools already fill the role: Chinese super-apps such as Alipay offer their own instalment products inside the wallet, and in India instant bank payments dominate everyday spending. The contrast shows that BNPL succeeds most where cards are common but credit card use is unpopular, and where digital wallets have not already absorbed the job. In Australia, BNPL has become so familiar that it features among the payment options consumers trust most, as shown in our report on the most trusted online payment options in Australia.
The leading providers
A handful of providers dominate the global BNPL market. The chart compares the largest by gross merchandise value, the total value of purchases they financed.
Klarna far ahead: Klarna financed about 128 billion dollars of purchases in 2025, several times more than Affirm or PayPal Pay Later.
Klarna is the largest BNPL provider in the world, with about 127.9 billion dollars of gross merchandise value in 2025. Affirm, the leading US specialist, financed about 36.7 billion dollars in its fiscal year to June 2025, and PayPal, whose Pay Later products ride on its enormous checkout network, handled more than 33 billion dollars in 2024. Afterpay, now owned by Block, the parent of Square and Cash App, is another major player, especially in the United States and Australia. Beyond these giants sits a long tail of regional providers: Zip and Sezzle in North America and Australia, Scalapay in Italy, Alma in France, and Tabby and Tamara in the Middle East, where BNPL has grown especially quickly.
The competitive landscape is shifting as big technology and payment firms move in. Apple launched and then withdrew its own pay-later product, choosing instead to integrate third-party providers into Apple Pay, while banks and card networks now offer instalment options on existing credit and debit cards. Large retailers, including Amazon, partner with BNPL firms at checkout, a trend reflected in the payment forms used by Amazon Prime shoppers. The line between BNPL providers, banks and payment networks is blurring fast.
Affirm: the US specialist
Affirm, founded by PayPal co-founder Max Levchin, has become the largest dedicated BNPL lender in the United States. The chart tracks the value of purchases it financed.
Accelerating growth: Affirm GMV rose from about 20 billion dollars in fiscal 2023 to nearly 37 billion in fiscal 2025.
Affirm financed about 20.2 billion dollars of purchases in fiscal 2023, 26.6 billion in fiscal 2024 and 36.7 billion in fiscal 2025, growth of about 38 percent in the latest year. Its model differs from pure pay-in-four players: a large share of its lending is in longer-term instalment loans for bigger-ticket items such as furniture, electronics and travel, many of which carry interest. Partnerships have been central to its rise, including a long-running deal to provide instalments at Amazon checkout and an integration with Apple Pay. Affirm has also launched its own debit card that lets users choose to split purchases after the fact, part of a wider push to turn BNPL into an everyday spending tool rather than an occasional checkout option.
Klarna: the global leader
Klarna, founded in Sweden in 2005, is both the pioneer and the largest company in BNPL. After listing on the New York Stock Exchange in September 2025, it published its first full year of results as a public company. The chart shows how fast it grew.
Growth on every measure: in 2025 Klarna grew GMV by 22 percent, revenue by 25 percent, active consumers by 28 percent and merchants by 42 percent.
Klarna processed about 127.9 billion dollars of GMV in 2025, up 22 percent on the year, and its revenue rose 25 percent to about 3.5 billion dollars. Its active consumer base grew 28 percent to 118 million people, and the number of merchants offering Klarna rose 42 percent to about 966,000. The company returned to an adjusted operating profit, of about 65 million dollars, after years of heavy losses. Klarna is now repositioning itself as a broader digital bank, offering accounts, cards and savings alongside BNPL, and it has leaned heavily on artificial intelligence to cut costs, a strategy that places it at the center of the trends explored in our report on artificial intelligence in finance. The United States has become its most important growth market, where it competes head to head with Affirm and Afterpay.
Who uses buy now pay later
BNPL is overwhelmingly a young persons product. Roughly half of all US BNPL users are under the age of 33, and adoption is highest among Gen Z and millennials, many of whom are wary of credit cards or have thin credit histories that make cards hard to obtain. For these shoppers, a fixed schedule of interest-free instalments feels more transparent and less risky than revolving card debt. Older consumers are catching up, however, and use among baby boomers has grown steadily as BNPL options have spread to more everyday retailers.
Adoption is broad. Industry estimates put the number of BNPL users in the United States at more than 90 million, and Klarna alone had 118 million active consumers worldwide in 2025. Fashion and beauty remain the most common purchase categories, followed by electronics, home goods and travel, but the mix is shifting toward everyday spending. Lifestyle patterns matter too: the way BNPL use differs between groups of Amazon shoppers is set out in our report on BNPL purchases on Amazon by lifestyle. Merchants have noticed that BNPL shoppers skew young and digitally native, which is one reason the method has become standard at checkouts aimed at younger audiences.
The late payment problem
The biggest concern about BNPL is whether users can keep up. The chart shows the share of US BNPL users who say they paid late at least once in the past year.
Rising stress: about 41 percent of US BNPL users paid late at least once in the past year, up from 34 percent in the previous survey.
In the latest LendingTree survey, about 41 percent of US BNPL users said they had made at least one late payment in the past year, up from 34 percent a year earlier. The good news is that most of those late payments were small slips: around 72 percent of late payers caught up within about a week, before the missed payment would typically be reported to credit bureaus. Formal default rates at the largest providers remain low, generally in the low single digits. But the rising share of people falling behind is a warning sign, especially as borrowers increasingly juggle several loans at once. Around 23 percent of users reported having three or more BNPL loans open at the same time, which makes it easy to lose track of payment dates and harder to see the true total owed.
Visibility is changing. For years, BNPL loans rarely appeared on credit reports, which meant lenders could not see how much a person owed across providers. That is now shifting: credit bureaus have begun accepting BNPL data, and FICO has announced credit scores that factor in BNPL loans. The effect cuts both ways. Consumers who pay on time may build a credit history, while those who fall behind may see their scores suffer. Debt collectors are also increasingly handling BNPL accounts, a sign that the product has become a meaningful part of household credit, alongside the bank loans in the United States tracked by regulators.
From luxuries to groceries
BNPL was built for discretionary shopping, but many consumers now use it to cover everyday needs. The chart shows how US users rely on it.
Stretching the budget: more than half of US BNPL users rely on it to bridge the gap to their next paycheck, and nearly three in ten use it for groceries.
About 54 percent of US BNPL users say they use it as a bridge to their next paycheck, and roughly 29 percent say they have used it to buy groceries, up from about 25 percent a year earlier. Around 16 percent have used it for food delivery or takeout. These numbers reflect the pressure that years of high inflation have placed on household budgets, a theme covered in our reports on the monthly inflation rate in the United States and the US cost of living. When people finance essentials such as food with short-term loans, it can be a sign of genuine financial strain rather than simple convenience.
Supporters of BNPL argue that an interest-free instalment plan is a cheaper way to smooth a tight month than a credit card at 20 percent interest or a payday loan at far higher rates. Critics counter that the ease of splitting small, routine purchases encourages people to spend beyond their means and to pile up obligations that are hard to track. Both can be true at once, depending on the borrower, which is why regulators have focused less on banning BNPL than on making sure lenders check affordability and disclose terms clearly.
Why merchants embrace BNPL
For retailers, the case for BNPL is mostly about sales. Providers and industry studies consistently report that offering BNPL at checkout raises conversion rates and lifts average order values, often by double-digit percentages, because shoppers are more willing to complete a purchase, or buy a more expensive item, when they can spread the cost. For a retailer, that extra revenue can more than offset merchant fees that are higher than those for cards. BNPL also brings in younger customers who might otherwise abandon their baskets, a key concern given the online conversion rates tracked in our report on global conversion rates by industry and device.
BNPL providers have also become powerful marketing channels in their own right. Apps from Klarna, Afterpay and others let users browse deals, save wish lists and discover brands, sending traffic to merchants much like a shopping search engine. For e-commerce platforms, BNPL has become a standard feature: platforms such as Shopify offer built-in instalment options, part of the payments ecosystem behind the growth covered in our report on Shopify revenue worldwide. The result is that BNPL is no longer a differentiator for merchants but an expectation, particularly in fashion, beauty and electronics.
Regulators step in
For much of its early life, BNPL operated in a regulatory grey zone, because short interest-free loans often fell outside traditional consumer credit rules. That is changing around the world. Australia, one of the earliest BNPL markets, brought the product under its credit laws in 2025, requiring providers to hold a credit licence and assess whether loans are suitable. In the United Kingdom, the Financial Conduct Authority began regulating BNPL, formally known as deferred payment credit, in July 2026, introducing affordability checks, clearer information and access to the financial ombudsman for complaints.
The European Union is bringing BNPL into scope through its revised Consumer Credit Directive, which extends affordability and disclosure rules to many interest-free and small loans that previously escaped regulation. In the United States the picture has been more uneven. In 2024 the Consumer Financial Protection Bureau moved to treat BNPL lenders like credit card providers for key consumer protections, but it later stepped back from enforcing that interpretation, leaving states and credit bureaus to fill some of the gaps. The overall direction is nonetheless clear: BNPL is being treated less like a payment button and more like the credit product it is, a shift that fits the wider tightening of rules across fintech in Europe and beyond.
Where BNPL goes next
BNPL is entering a new phase. The explosive early growth is giving way to steadier expansion of around 10 percent a year, as the market matures and regulation raises costs. The leading providers are responding by broadening into full-service digital finance: Klarna now offers bank accounts and cards, Affirm has its own debit card, and both are pushing into in-store payments and longer-term lending. At the same time, banks and card networks are offering their own instalment plans on existing cards, so shoppers can split a purchase without leaving their bank.
The biggest questions are about credit quality and competition. If rising late payments turn into higher defaults, providers will have to tighten lending, slowing growth. If banks and card networks match BNPL features cheaply, the specialists may struggle to defend their margins. And as regulation brings BNPL fully into the credit system, with affordability checks and credit reporting, its advantage of speed and simplicity will narrow. Even so, the underlying demand is durable: consumers, especially younger ones, like the clarity of fixed instalments, and merchants like the extra sales. The likeliest outcome is that BNPL becomes a standard feature of how people pay, woven into cards, wallets and bank apps, rather than a separate category, much as the broader payments market described in our Amazon statistics and facts has absorbed new ways to pay over time.
BNPL in numbers
A few figures capture the scale and the risks of buy now pay later.
Together they describe a payment method that has scaled fast and now faces the scrutiny that comes with maturity.
Frequently Asked Questions
Buy now pay later payments reached about 560 billion US dollars worldwide in 2025, up from roughly 493 billion in 2024, and are forecast to exceed 900 billion by 2030.
BNPL lets shoppers split a purchase into instalments, most often four interest-free payments over six weeks. The provider pays the merchant upfront and collects from the shopper, earning mainly from merchant fees.
Klarna is the largest, with about 127.9 billion dollars of gross merchandise value and 118 million active consumers in 2025. Affirm, Afterpay and PayPal are the other leading providers.
In the Nordic countries and Germany, where it accounts for around a fifth to a quarter of online payment value, helped by a long tradition of paying by invoice. It is far less common in China and India.
About 41 percent of US BNPL users said they paid late at least once in the past year in the latest LendingTree survey, up from 34 percent a year earlier, although most caught up within a week.
Increasingly, yes. About 29 percent of US BNPL users say they have used it to buy groceries, and 54 percent say they use it to bridge the gap until their next paycheck.
It can. Missed payments may be reported and passed to collections, and FICO has begun building BNPL loans into new versions of its credit scores, so on-time and late payments are becoming more visible.
Increasingly. Australia brought BNPL under credit law in 2025, the UK began regulating it through the Financial Conduct Authority in July 2026, and the EU is bringing it into its consumer credit rules.
Because it tends to lift sales. Providers and industry studies report higher conversion and larger average order values when BNPL is offered at checkout, which is why merchants accept fees above typical card costs.
ResearchAndMarkets - global BNPL payment value and forecast to 2030.
Klarna Group plc - full year 2025 results.
Affirm Holdings - gross merchandise value by fiscal year.
Worldpay Global Payments Report - BNPL share of e-commerce by market.
LendingTree via ACA International - BNPL late payments and everyday use.