Why buy now, pay later is a trend to watch

Friday, March 31, 2023 4 minute read
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4 minute read

Editor's note: This story was updated on March 30, 2023, from its original publish date of February 21, 2022.

Over the past few years, buy now, pay later (BNPL) has gone from a niche payment method to one of the hottest trends in payments.

Installment payment plans are nothing new. Retailers like furniture stores have allowed customers to pay off large purchases in installments for decades. Buy now, pay later brings the concept into the digital age by allowing any retailer to offer installment payments for any product, no matter how small, both online and in-store.

The recent surge in BNPL transactions can be attributed to several factors, including rising merchant adoption, its omnichannel application, flexibility, and loyal youth consumers."

Gaylon Jowers, president at TSYS Issuer Solutions, SEVP at Global Payments

Gaylon Jowers, President at TSYS Issuer Solutions, SEVP at Global Payments

Unlike other payment types, customers are often exposed to BNPL at different points in the buyer's journey. For example, when browsing products online, they may see the BNPL installment price on the product page, which helps make the product feel more affordable. Consumers can also choose BNPL at checkout. In addition, some issuers and financial institutions are now offering buy now, pay later so that cardholders can pay for specific transactions in installments, allowing them to better manage cash flow and potentially avoid late fees.

BNPL by the numbers

According to particularly Gen Z and millennials.

BNPL usage forecast in 2026 by generation

Gen Z


Gen X

Baby boomers

Acceptance of buy now, pay later can be seen across the globe:

  • Mercator notes that the US volume of BNPL is projected to surpass the $100 billion mark annually by 2024, up from $55 billion in 2021.
  • According to a recent Visa survey, Canadian consumers increased their adoption of installment payments by 30% within the previous 12 months, with installment payments in Canada estimated to account for $50 billion annually.
  • Research and Markets expects BNPL market share in the UK to reach nearly $117 million by 2028.
  • According to Bloomberg, China could see BNPL account for $58 billion in sales within the next three years.

The rise of regulation

BNPL is a relatively unregulated payment method, which is being looked at more closely.

In December 2021, the Consumer Financial Protection Bureau (CFPB) issued a series of orders to five major BNPL providers to collect information about the risks and benefits of their solution. The CFPB is concerned about the potential for consumers to accumulate debt too quickly.

Regulators around the globe are similarly weighing their options. PYMNTS notes that the UK is currently exploring whether or not the exemption in the Consumer Credit Act for delayed payment of goods and services applies to BNPL. The European Commission and Australia may also seek to regulate BNPL within the next year.

BNPL is likely here to stay, but how it will look during a down economic cycle, with greater regulatory oversight or as interest rates rise remains to be seen."

Cameron Bready, President and CEO at Global Payments

Cameron Bready, President and CEO at Global Payments

The way forward

To ensure you're meeting customer payment preferences, buy now, pay later is a growing trend that you should explore. Working with a trusted payment partner can help you navigate regulations that may impact this space over the year and beyond.

Looking to add buy now, pay later to your payments mix? Learn more about our options.

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