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Written by Cyndie Martini
on August 30, 2022

Buy Now Pay Later (BNPL) services are being provided by larger, more traditional financial firms, helping the space expand. Because of this expansion, BNPL is also expected to grow by more than $40 billion over the next several years. In this article, we’ll look at both trends in more detail.

BNPL used to be a service offered only by fintechs. Now we are seeing more financial institutions and tech companies step into this space. Marcus by Goldman Sachs is one example. Certainly not a first mover in BNPL, Goldman started offering the service through Marcus in the summer of 2020.

Mastercard began offering BNPL in the Fall of 2021. Its offering is called Mastercard Installments. Because of Mastercard’s positioning as a major credit card processor, it is able to drive scale in BNPL. By partnering with a large number of merchants, Mastercard is expanding the overall BNPL market.

While Apple is a tech company, it will begin offering BNPL this fall, called Pay Later. Apple’s offering is made possible by using Mastercard Installments on the backend. This is similar to what Apple did with its Apple Card, which uses Goldman Sachs on the backend for processing.

Pure-play BNPL firms such as Affirm are also expanding through partnerships. Affirm’s current partners include Amazon, Walmart, Expedia, Peloton, Gucci, Dick's Sporting Goods, Shopify, and Target.

Other BNPL firms include:

  • Upgrade
  • Marcus (Goldman Sachs)
  • PayPal
  • Sezzle
  • Splitit
  • Afterpay

Many BNPL firms charge 6% to merchants. This is much higher than the 2-3% charged by credit card processors. However, as more BNPL firms enter the market, there is the potential to drive this high cost down to levels currently charged by credit card processors.

BNPL is expected to continue growing, reaching $41.83 billion in the 2022-2026 timeframe. This would hit a CAGR of 29.36%, according to ReportLinker.


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