Highlights. Nearly 1 in 5 American consumers used Buy Now, Pay Later (BNPL) in 2023.
- Consumers primarily use BNPL for smaller transactions with an average loan size of $135.
- On average, BNPL users have borrowed $2,085 across all their BNPL purchases.
- The typical BNPL purchase requires a 25% down payment and has 0% interest over the six-week repayment period.
U.S. BNPL Statistics
Buy Now, Pay Later first appeared as a payment method in the United States in 2019.
- An estimated 88.2 million people in the U.S. have used BNPL, up 11.6% YoY.
- The average BNPL loan amount is $135 over six weeks; for comparison, traditional installment loans average $800 over 8-9 months.
- 73% of applicants were approved for BNPL credit in 2021, 4% more than in 2020.
- 89.3% of BNPL users report making all payments on time and in full.
- 10.5% of BNPL borrowers were charged at least one late fee in 2021, up from 7.8% in 2020.
- 77% of BNPL users make installments using a debit card or bank account.
- 10% of users make installment payments using a credit card, 8% use a payment service, and 6% use a prepaid card.
BNPL Use Statistics
29% of consumers offered BNPL and 19% of consumers overall used this payment method in 2023.
- 64% of U.S. consumers report being offered a BNPL payment option in 2023.
- 5.2% of BNPL customers are frequent users, having used this payment method over ten times in the past year.
- Heavy users of BNPL are 41.3% more likely to recommend it to others.
- 53.2% of Americans who used BNPL in the past year used it only 1-3 times.
- 53.2% of BNPL users say they will probably use this payment method again.
- 57% of non-users believe that lack of credit is the primary reason people use BNPL. However, only 19.1% of actual users choose BNPL for this reason.
- Convenience is the most common reason people use BNPL at 52.6%.
- Women are 58.7% more likely to have used BNPL than men, but men are 5.4% more likely to be heavy BNPL users.
- 22.7% of women and 14.3% of men in the U.S. report using BNPL in the past year.
BNPL Use by Age
Users of BNPL in the United States tend to be young, with 41.6% of users under 36 years old.
- 22% of consumers under 36 have borrowed using BNPL, compared to only 10% of those over 65.
- Users younger than 36 are 54.5% more likely to cite a lack of credit as their reason for choosing BNPL.
- 15.6% of 40- to 60-year-olds have used BNPL in the past year, the lowest rate of any age group.
- 20.3% of consumers under 40 years old and 20.1% of consumers over 60 years old used BNPL.
- Consumers over 60 years old are most likely to use BNPL when offered at check-out, with 34.3% of those offered using this payment option in the past year.
- 27.9% of consumers under 40 and 23.8% of consumers over 60 offered BNPL chose this payment method in the past year.
- 40% of global BNPL users are between 25 to 34 years old, the most of any age group.
- Only 4% of BNPL users worldwide are over 55.
BNPL Use by Region
In the United States, BNPL is most popular with consumers living in southern states.
- 23.8% of consumers in the South used BNPL in the past year, a 25.3% higher rate than the average for all regions.
- Of consumers in the South who were offered, 37.4% used BNPL in the past year.
- 16.5% of consumers in the West used BNPL or 25.7% of those offered.
- 15.2% of consumers in the Northeast used BNPL or 21.8% of those offered.
- 14.8% of consumers in the Midwest used BNPL or 22.9% of those offered.
BNPL Use by Demographics
BNPL users are more likely to be employed; 70.6% have full or part-time employment, 6.97% more than users of other payment methods.
- 72.6% of Buy Now, Pay Later users earn less than $75,000 annually.
- BNPL users earning less than $40,000 have the highest proportion of light users at 57.8%, and those earning more than $75,000 have the most heavy users at 19.1%.
- People renting their homes are 51.9% more likely to use BNPL than homeowners.
- 24.3% of renters and 16% of homeowners used BNPL in the past year.
- 22.7% of consumers with a high school level education used BNPL, a 73.3% higher rate than those with a college degree.
- 13.1% of college-educated consumers used BNPL or 19.7% of those offered.
- 37.2% of BNPL users have a credit score below 620, a rejected credit application, or a delinquent loan, a 95.8% higher rate than U.S. consumers on average.
- 88% of BNPL users have an open credit card, 13 percentage points more than non-users.
- BNPL borrowers have, on average, $11,981 less in non-retirement savings and cash than consumers who do not use BNPL.
- 25% of BNPL users have zero non-retirement savings or cash that could be used in an emergency.
U.S. BNPL Market Statistics
The BNPL market is exploding; from 2019 to 2021, the number of BNPL loans in the U.S. grew 970% from 16.8 million to 180 million.
- The BNPL market is estimated to be worth $94.9 billion as of 2023.
- From January to October 2023, BNPL purchases totaled $58.5 billion, up 14.5% YoY.
- The Gross Merchandise Volume (GMV)* for BNPL in the U.S. tripled between 2020 and 2021 and is 12x more than in 2019.
- The average BNPL purchase amount grew 11.6% from $121 in 2020 to $135 in 2021.
- BNPL results in an 85% higher average order value than when customers use other payment methods.
- BNPL omnichannel shoppers spend 72% more per transaction when compared to other online shoppers.
BNPL Purchase Categories
Home & furniture is the most popular spending category, with 42% of users making these purchases with BNPL.
- 48% of shoppers 25 to 34 have used BNPL to purchase home appliances, 29.7% more than the average of all age groups.
- 30% of BNPL purchases are for electronics, making this the second most common BNPL category.
- 62% of 18 to 24-year-old consumer electronics shoppers have used BNPL to purchase video gaming consoles.
- Using BNPL for “everyday” purchases such as gas, groceries, and utilities totaled $229.2 million in 2021, up 434% from 2020.
- Apparel & beauty products accounted for 80.1% of BNPL payments in 2019 but only 58.6% in 2021.
- Globally, retail accounts for 73% of BNPL revenue.
- BNPL usage for retail purchases is estimated to grow 25.6% annually through 2030.
- The fashion sector accounts for over 43% of global BNPL revenue.
- The expected BNPL annual growth rate for fashion and garments is 27.2%, the most of any spending category.
BNPL Holiday Shopping
In the 2023 holiday season, consumers used BNPL for $17 billion in purchases, up 16.9% YoY.
- 20% of shoppers planned to use BNPL to purchase gifts during the 2023 holiday season.
- On Cyber Monday 2023, consumers used BNPL for $782 million in purchases or 6.52% of all online sales.
- BNPL use on Cyber Monday 2023 was up 18.8% from $658 million in 2022.
- BNPL spending is estimated to have reached $9.3 billion in November 2023, the highest monthly GMV on record for this payment method.
- In October 2023, BNPL spending drove $6.4 billion in online sales, up 6% YoY.
Global BNPL Market Statistics
The global Buy Now, Pay Later (BNPL) market is worth $7.63 billion; projections indicate that it will be worth $38.57 billion in 2030.
- The global BNPL GMV is an estimated $300 billion.
- From 2023 to 2030, the worldwide BNPL revenue is projected to have a compound annual growth rate of 26.1% from $7.63 billion to $38.57 billion.
- North America has the highest revenue share in the global BNPL market at 29.9%.
- The Asia Pacific BNPL market is set to grow by 28.4% annually through 2030, the fastest of any region.
- Europe’s BNPL payments have a current GMV of $190.2 billion, with a projected increase to $326.2 billion by 2028.
- From 2022 to 2023, BNPL website traffic grew 24.3% to 420.8 million visits.
- The combined monthly users of the top BNPL apps have risen 96.5% from 5.7 million in 2021 to 11.2 million in 2022.
- 40% of Australian consumers use Buy Now Pay Later, and 45% of online retail businesses in the country offer BNPL as a payment method.
BNPL Company Statistics
There are 5 major firms offering BNPL in the U.S.: Affirm, Klarna, Afterpay, Zip (formally Quadpay), and Sezzle, accounting for over 95% of the market share.
- The five major lenders originated $24.2 billion in BNPL loans, or GMV, in 2021.
- Two of the biggest BNPL companies operating in the US are Australian. BNPL has existed in Australia since 2015, four years earlier than in the U.S.
- Of the other top BNPL lenders, Affirm and Sezzle are headquartered in the U.S., and Klarna is a Swedish company.
- The top three BNPL applications, Affirm, Klarna, and Afterpay, each have over 1.1 million unique downloads.
- Emerging BNPL firms in the U.S. include Zip, Sezzle, and Uplift with over 100 thousand app downloads each.
- 2 out of 5 of the leading BNPL lenders prohibit removing a payment method, meaning borrowers cannot “turn off” autopay.
- BNPL lenders earn 13.4% of their revenue through consumer fees and 6.9% from late fees.
Afterpay
Afterpay is the most popular BNPL company in the U.S., with 1.4 million Americans making 20.9 million individual transactions in 2020 with this lender.
- Afterpay is the only primary BNPL lender that does not conduct a soft credit check on its customers.
- Over 124,000 live websites offer Afterpay worldwide.
- 54,000 websites offer Afterpay in the U.S., 43.1% of the worldwide total.
- Afterpay is the 2nd most offered service on the internet in the pay later category, both in the U.S. and globally.
Klarna
Klarna is the most offered pay-later service on the internet both in the U.S. and globally.
- Many major retailers, including Nike, Instacart, and Sephora, offer Klarna as a payment option at check-out.
- Over 314,000 live websites offer Klarna globally.
- 80,000 websites in the U.S. use Klarna, 25.6% of all sites using this payment method.
- 86,000 or 27.4% of websites offering Klarna are based in Germany, the most of any country.
Affirm
Consumers prefer Affirm for large purchases. The average payment size for Affirm is $91.80, 94.8% larger than installments made to the other major BNPL lenders.
- Affirm is the only major BNPL provider with no late fees.
- Over 20,000 live websites offer Affirm worldwide.
- 18,000 websites in the U.S. offer Affirm, 89.0% of the global total.
- Affirm is the 4th most offered pay-later service on the internet, both in the U.S. and globally.
Sezzle
Sezzle is used more for smaller purchases than the other BNPL lenders, with an average installment size of $23.30.
- Over 34,000 live websites offer Sezzle worldwide.
- 29,000 websites in the U.S. offer Sezzle, 83.2% of the global total.
- Sezzle is the 3rd most offered pay-later service on the internet, both in the U.S. and globally.
These data and insights were compiled by the Capital One Shopping team based on publicly available data.
Sources
- Federal Reserve Bank Philadelphia, Buy Now Pay Later: Survey Evidence of Consumer Adoption and Attitudes
- Consumer Financial Protection Bureau, Reports
- Klarna, About Klarna
- Harvard Business School, Buy now, pay later credit: User characteristics and effects on spending patterns
- Nielsen, The rise of buy now, pay later services in Australia opens up the impulse opportunity
- Intuit, Buy now pay later surges throughout pandemic, consumers’ credit takes a hit
- Statista, Markets
- Grand View Research, Buy Now Pay Later Market Analysis From 2017 to 2030
- Similarweb, The Rise of BNPL
- Research and Markets, Europe Buy Now Pay Later Business and Investment Opportunities Databook
- Federal Reserve Bank of New York, Who Uses “Buy Now, Pay Later?”
- Adobe, News
- Builtwith, Trends
- Insider Intelligence, US Buy Now, Pay Later Forecast 2022