More consumers take on more BNPL loans

More consumers than ever are turning to buy now, pay later (BNPL) plans, and new data from the Consumer Financial Protection Bureau suggests that, despite rapid growth, loan performance is improving rather than deteriorating. While usage, loan volumes and average balances continue to rise, late fees and charge-offs are declining, indicating that many consumers are managing BNPL obligations more effectively than critics have feared.

The report, The buy now pay later market data spotlight, draws on data provided by the six largest BNPL companies for the calendar years 2022 and 2023. Those companies are Affirm, Afterpay, Klarna, PayPal, Sezzle and Zip, a group the CFPB said constitutes the bulk of the "pay-in-four" BNPL market.

"Despite slowing growth in recent years, the BNPL market continues to significantly expand its user base with consumers using the product more frequently and taking on larger BNPL loan amounts per year," the CFPB wrote.

At least 53.6 million Americans

According to the data, 53.6 million Americans had taken out at least one BNPL loan with these firms in 2023, which represents a 12 percent increase over 2022.

In all, 273.8 million BNPL loans were made in 2022 and 335.8 million in 2023. The total value of loans made in 2023 was $43.9 billion, up from $33.4 billion in 2022. The average loan size grew from $122 to $131, according to the bureau's calculations.

The report also suggests that the typical consumer borrower is turning to BNPL more frequently. The average number of loans a consumer took increase by 11 percent from 2022 to 2023, while the average total debt per consumer rose 14 percent, from $745 to $848, when adjusted for inflation.

Late fees, charge-offs, down

Only four of the six companies surveyed charge late fees, the CFPB noted. Yet, despite overall growth in origination volume, late fee revenue among those providers fell on an absolute basis. In 2021, $174.8 million in late fees was assessed, and of that amount $93.8 million was collected. In 2023, $135.9 million in late fees was assessed and $80.3 million collected.

What's more, the percentage of BNPL loans that resulted in late fees and the total late fees collected as a share of origination volume across the four firms fell between 2019 (when it was 0.38 percent) and 2023 (0.18 percent).

The percentage of BNPL loans designated as charge-offs (deemed severely delinquent or written off as bad debt) also appears to be on a downward trajectory. While the loan charge-off rate rose from 2.44 percent in 2021 to 2.63 percent in 2022, it fell to 1.83 percent in 2023.

"In our market monitoring discussions with BNPL lenders, several have stated that lower charge-off rates are a result of improved credit models and as shifting focus on increasing usage by their existing customer base," the report stated.

Will 2025 set records?

There is no central repository of information on BNPL loans, and the CFPB's data lags by a couple of years. However, recent information suggests that the popularity of BNPL is growing, especially in the lead-up to the year-end holidays.

Adobe Analytics reported that Americans spent $10.1 billion online using BNPL between Nov. 1 and Dec. 1, 2025. Cyber Monday (Dec. 1), alone, generated $1.03 billion in online BNPL spending, a 4.04 percent increase over 2024, the company reported.

Adobe Analytics also noted that more than three-fourths of online BNPL transactions (79.4 percent) are conducted using mobile devices.

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