As Klarna prepares for its long-anticipated New York IPO, attention has turned once again to the rise of buy now, pay later (BNPL) services that have reshaped consumer financing in the U.S. and abroad. Once a niche option, BNPL has surged in popularity since the pandemic, with billions in online sales now processed through installment plans.
1. Share of Online Spending
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From January to August 2025, U.S. consumers spent $696.2 billion online, with $56.3 billion (8.1%) of that coming from BNPL purchases, per Adobe Analytics.
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In 2024, BNPL accounted for $82.4 billion in total online spending — a 9.9% increase year-over-year.
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BNPL’s share of e-commerce continues to expand, though it still trails far behind credit card usage.
2. On-Time Payments
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Klarna boasts a 99% global repayment rate, while Afterpay reported 96% of customers paid on time in Q2 2025.
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Affirm disclosed a 2.3% delinquency rate (loans over 30 days late) as of June 2025.
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However, Federal Reserve Bank of Philadelphia data shows a slight drop in punctuality: “pay-in-four” users making all payments on time fell by 1 percentage point between late 2023 and late 2024.
3. Average Monthly Payment
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57% of BNPL users reported monthly payments of $100 or less, according to The Motley Fool.
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By contrast, the average monthly credit card payment was $181 (Experian, Q1 2025).
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Only 1% of BNPL users carried monthly payments above $1,000, suggesting most use the service for small-ticket items rather than large purchases.
4. Uses Across Generations
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Millennials and Gen Z are the most frequent BNPL users, particularly for everyday purchases like clothing or electronics (PYMNTS Intelligence 2024).
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Baby Boomers and seniors remain skeptical, with the majority saying they would not use BNPL for daily expenses.
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This generational divide reflects differences in trust, digital adoption, and attitudes toward debt.
5. Credit Scores
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BNPL attracts more consumers with subprime (580–619) and near-prime (620–659) credit scores than traditional credit products.
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Still, about 50% of applicants have scores above 660, suggesting the service appeals broadly across credit tiers (LexisNexis Risk Solutions, 2023).
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Because most BNPL providers don’t report to credit bureaus, regulators warn this creates a “blind spot” — untracked debt that could mask financial vulnerability.
Regulatory Backdrop
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The CFPB had required BNPL firms to handle disputes, issue refunds, and send billing statements, but the Trump administration revoked that rule, easing compliance burdens for lenders.
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Consumer advocates argue this leaves gaps in oversight, particularly as BNPL expands beyond luxury goods into everyday spending.
Outlook
Klarna’s IPO underscores how deeply BNPL has penetrated consumer finance, growing rapidly as shoppers seek flexibility amid high living costs. But questions remain: Can BNPL remain sustainable if delinquency rates creep up, and will regulators reimpose stricter protections?