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Klarna IPO Puts Spotlight on BNPL Trends with Five Key Charts

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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

  • 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.

  • In 2024, BNPL accounted for $82.4 billion in total online spending — a 9.9% increase year-over-year.

  • BNPL’s share of e-commerce continues to expand, though it still trails far behind credit card usage.

2. On-Time Payments

  • Klarna boasts a 99% global repayment rate, while Afterpay reported 96% of customers paid on time in Q2 2025.

  • Affirm disclosed a 2.3% delinquency rate (loans over 30 days late) as of June 2025.

  • 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

  • 57% of BNPL users reported monthly payments of $100 or less, according to The Motley Fool.

  • By contrast, the average monthly credit card payment was $181 (Experian, Q1 2025).

  • 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

  • Millennials and Gen Z are the most frequent BNPL users, particularly for everyday purchases like clothing or electronics (PYMNTS Intelligence 2024).

  • Baby Boomers and seniors remain skeptical, with the majority saying they would not use BNPL for daily expenses.

  • This generational divide reflects differences in trust, digital adoption, and attitudes toward debt.

5. Credit Scores

  • BNPL attracts more consumers with subprime (580–619) and near-prime (620–659) credit scores than traditional credit products.

  • Still, about 50% of applicants have scores above 660, suggesting the service appeals broadly across credit tiers (LexisNexis Risk Solutions, 2023).

  • 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

  • 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.

  • 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?

Apple Negotiates with Barclays and Synchrony to Replace Goldman Sachs in Credit Card Partnership

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Apple is currently in talks with Barclays and Synchrony Financial to replace Goldman Sachs as its credit card partner, according to sources familiar with the matter. This move comes as Goldman Sachs steps back from its consumer finance ambitions, following the launch of the Apple Card in 2019. Barclays and Synchrony are now vying for the opportunity to partner with one of the world’s most recognizable brands, although the original terms of the deal were viewed as risky and unprofitable by several financial firms.

Negotiations between Apple and Barclays have been ongoing for several months, but sources suggest that it could take some time to finalize a deal. JPMorgan Chase has also been in talks with Apple regarding the partnership. Despite the credit card agreement between Apple and Goldman Sachs lasting until 2030, Goldman’s CEO David Solomon mentioned during an earnings call that the partnership may end sooner than expected.

Goldman Sachs has been scaling back its consumer business after spending billions to cover potential losses. In 2024, the company transferred its General Motors credit card business to Barclays, allowing the latter to expand its card offerings in the U.S. This shift aligns with Goldman’s decision to reduce its retail ambitions, focusing instead on its traditional investment banking and trading operations.

 

Millennials Lead Holiday Spending Despite Debt Concerns

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This holiday season, millennials are stepping up as the most optimistic and active spenders among all generations. According to a recent TransUnion report, 63% of millennials plan to match or increase their holiday shopping expenditures compared to last year. This group, many of whom are now parents, is poised to play a dominant role in the expected record-breaking holiday spending.

Millennial Optimism Drives Spending

Charlie Wise, TransUnion’s senior vice president of global research and consulting, highlighted the financial confidence of millennials heading into the holidays. Many in this generation have experienced wage growth that outpaces inflation, coupled with a steady employment landscape. “When people have jobs, that confidence translates into spending,” Wise explained.

The National Retail Federation predicts holiday spending between November 1 and December 31 will reach $979.5 billion to $989 billion, marking a new record. Millennials, with their robust financial optimism, are expected to significantly contribute to this surge.

Rising Budgets Amid Growing Debt

Despite optimism, consumer debt is a growing concern. Deloitte’s holiday retail survey revealed that shoppers plan to spend an average of $1,778 this season—an 8% increase from last year—even as U.S. credit card debt has surpassed $1.17 trillion. Moreover, a NerdWallet survey found that 28% of holiday shoppers have yet to pay off debts from last year’s gift purchases.

Shoppers are turning to various payment methods to finance their spending:

  • 74% plan to use credit cards.
  • 28% will dip into savings.
  • 16% intend to utilize buy now, pay later (BNPL) services.

Risks of Buy Now, Pay Later Services

BNPL services are among the fastest-growing financing options, with spending expected to peak on Cyber Monday at nearly $993 million, according to Adobe Analytics. While these services offer short-term flexibility—often with 0% interest—experts caution that they may lead to long-term financial strain.

Marshall Lux, a senior fellow at Harvard Kennedy School, noted, “If used properly, it’s great. But spreading purchases over a longer period can lead to high interest rates and cycles of debt.”

The risks of BNPL include:

  • Overspending due to ease of installment payments.
  • Missed or late payments that incur high penalties.
  • Interest rates that can rival credit card charges, reaching as high as 30%.

Financial Caution During the Holidays

While millennials and other consumers are eager to celebrate, experts advise mindful spending. Proper management of BNPL accounts and credit cards can help avoid debt traps, ensuring financial health beyond the holiday season.