Buy Now, Pay Later: Recent Developments and Implications

Zhu Wang

Richmond Fed Economic Brief, 2026, vol. 26, issue 05

Abstract: The total transaction value of "buy now, pay later" (BNPL) loans, measured in real terms, has grown roughly 20 percent per year since 2021, reaching an estimated $70 billion in 2025, or about 1.1 percent of total credit card spending. Given its current scale, debt outstanding and observed default rates, the impact of BNPL on financial stability appears limited at present, and while spillovers to other consumer credit markets are possible, there is no clear evidence of elevated stress to date. BNPL users generally retain access to traditional forms of credit and tend to carry higher balances on other unsecured credit products, but there is no clear evidence of a causal relationship between BNPL usage and unsecured debt balances, and the welfare effects of BNPL appear mixed.

Keywords: household and consumer finance; payments (search for similar items in EconPapers)
Date: 2026
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