BNPL Users Embrace Multiple Providers as Competition Tightens

Buy now, pay later providers turned the familiar installment loan into a checkout product: instant approval, four payments and, in many cases, no interest. That model matters beyond the sector’s loan volume because it reset consumer expectations for flexible, low-friction credit and gave merchants a tool to lift conversion rates. Regulation can alter disclosures, dispute handling and underwriting, but it is less likely to undo the payment behavior and retail infrastructure that BNPL firms have already embedded.

The U.S. Consumer Financial Protection Bureau issued an interpretive rule on May 22, 2024, treating BNPL lenders as credit-card providers for key purposes under the Truth in Lending Act, including refunds, billing disputes and statements. On May 6, 2025, the CFPB said it would not prioritize enforcement and was considering rescinding the rule. The reversal underscores the industry’s central point: oversight may raise compliance costs, yet the four-installment, often zero-interest format — and the demand it created — is likely to endure.

Buy now, pay later gained traction around 2019 through “Pay in 4,” which splits a purchase into four interest-free payments and gave shoppers an alternative to revolving credit-card debt. The product is now moving beyond small-ticket retail financing into longer, fixed-term credit. PYMNTS Intelligence estimates the U.S. BNPL market reached $175 billion in 2025, underscoring why demand from high-income and super-prime consumers matters to providers including Affirm, Afterpay, Klarna, PayPal and Sezzle.

In a June 2026 survey of 218 U.S. adults who had used BNPL in the previous three months, PYMNTS Intelligence found 66% would pay interest for a longer repayment schedule. The share rose to 82% among users of four or more providers, versus 46% among single-provider users. Willingness reached 79% for purchases of $500 to $999 and 76% among super-prime borrowers, compared with 50% for subprime users, pointing to mainstream demand beyond the traditional interest-free model.

Buy now, pay later products typically split a retail purchase into four installments and often carry no interest, but missed payments can trigger fees and borrowers can stack loans across platforms. The six largest providers originated 277.3 million loans financing $33.8 billion of merchandise in 2022, according to the Consumer Financial Protection Bureau. After the CFPB said in May 2025 it would deprioritize enforcement of a Biden-era BNPL policy, states moved to fill the gap, raising the prospect of costly, fragmented licensing for lenders operating nationwide.

New York’s Department of Financial Services formally published BNPL rules on July 15, 2026, opening a 60-day comment period through September 14. The proposal requires licensing, provides an $8 safe harbor for penalty fees and would take effect 180 days after adoption. Oregon’s Division of Financial Regulation separately proposed requiring nonbank lenders and service providers to obtain licenses. Loans of $50,000 or less due within 60 days would fall under payday-lending rules, while longer-term products would require consumer-finance licenses. Oregon’s comment period closed July 17, as industry critics warned the guidance stretches decades-old statutes beyond their intended scope.

Buy now, pay later products split purchase prices into fixed installments, often at low or zero interest, but their appeal extends beyond access to credit. By aligning repayments with pay cycles, BNPL gives consumers a predictable way to manage liquidity. That attracts Gen Z shoppers with thin credit histories as well as older borrowers balancing mortgages and other obligations, turning checkout finance into a broader cash-flow tool.

A PaymentsSource survey conducted in January 2021 found that 24% of Gen Z users and 38% of baby boomers chose BNPL to fit purchases into their cash flow. Some 44% of boomers said the service enabled a purchase they otherwise would not have made, while 68% of all transactions financed $400 or less. PayPal, Affirm, Afterpay and Klarna together held 77% of the market, with PayPal alone accounting for 45%.

Buy Now Pay Later (BNPL) “Pay in 4” plans typically split a purchase into no more than four installments over six to eight weeks, with an average loan size of $135, according to the Financial Technology Association. The product has gained importance as households contend with cost-of-living pressures and high credit-card interest rates. Supporters say its fixed schedules and lack of revolving balances offer flexibility, while its growth has sharpened the policy debate over access, underwriting and consumer safeguards.

On July 22, the FTA released a HarrisX survey of 1,890 U.S. adults conducted online from June 18 to June 23, 2026. It found 91% of BNPL users and 77% of all adults viewed the plans as a net positive, while 87% of users said they helped reduce reliance on high-interest credit cards. Some 88% of users, versus 75% of Americans overall, said elected officials should protect access. The industry group said it supports appropriate regulation that preserves payment flexibility while maintaining consumer protections.

Buy now, pay later, or BNPL, allows consumers to pay in installments and has expanded beyond retail into travel, food delivery and healthcare. PYMNTS Intelligence said these services are influencing where younger consumers choose to spend, making BNPL availability an important factor for businesses seeking to attract customers.

The latest PYMNTS Intelligence report found that 49% of Gen Z respondents and 62% of millennials said BNPL influences their travel booking choices. Its influence in food delivery and healthcare also continues to grow. The event data did not disclose the report's publication date, the transaction-value threshold used in the survey or the sample size.