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Written by Cyndie Martini
on April 25, 2023

Buy Now Pay Later (BNPL) services have taken off like a weed. In 2021, the BNPL market was estimated at $15.91 billion. It is expected to grow to $305.5 billion by 2023, according to GlobalData. From 2019 to 2021, the Consumer Financial Protection Bureau (CFPB) said loans originated in the U.S. by the top five lenders grew by 970 percent.

In 2021, 60% of consumers reported using a BNPL service. Of those, 46% said they are still making payments.

BNPL is meant to be an installment loan with a fixed number of interest-free payments. This is usually four payments spread over several months. However, some consumers can't pay off their loans by the intended date. This basically turns the installment loan into a credit card. Consumers are charged interest and continue paying until the loan is paid off. This is fairly common, as over half of consumers reported falling behind on their BNPL payments.

The following is BNPL usage across age groups, as reported by the Federal Reserve:

  • 18-35:    41.6%
  • 36-55:    31.6%
  • 56+:    26.8%

For reference, Gen Z is 11-26 years old, and Millennials are 27-42.

BNPL loans have attracted many Gen Z consumers. Gen Z is known for being wary of credit cards. But it seems they have opted for BNPL in place of using credit cards. 61% of Gen Z consumers said they had used BNPL, as reported by NCR. Gen Z prefers BNPL over credit cards because there's no interest, it is convenient, and it doesn't require a hit to your credit report.

Future interest in BNPL is highest among younger shoppers, but there is increasing interest across all age groups:

  • Gen Z shoppers: 65%
  • Millennial shoppers: 70%
  • Gen X shoppers: 50%
  • Baby boomer shoppers: 25%

Here's a quick rundown of the major players that offer BNPL:

  • Affirm
  • AfterPay
  • PayPal
  • Klarna
  • Apple

The above list is expected to grow as more fintechs and major financial institutions enter the space.


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