Buy Now, Pay Later: Point of Sale Installment Loans in the U.S. Market and International Perspectives, 2nd Edition
Scope of Report
Buy Now, Pay Later (BNPL) lending volumes were surging even prior to the global COVID-19 pandemic, with consumers shifting their financing preferences from revolving credit products such as credit cards to installment loan products.
After the initial onset of the pandemic and through subsequent waves of variants and variable infection rates, consumers both paid down their outstanding credit card balances and rapidly increased their use of debit cards and BNPL installment loans. In a landscape of unstable economic recovery and uncertain health outcomes, consumers sought out and adopted budgeting and payment methods that aligned with those trends and gave them greater control over their household finances.
Consumer credit is a multi-trillion dollar industry in the U.S., with BNPL installment loan (also called point-of-sale or POS installment loan) volume subsumed under the financial results reporting category of "personal loans."
This report slices out BNPL installment loans from their parent category, providing U.S. market size estimates for 2015 vs. 2020, as well as year-by-year projections through 2025. These projections were developed in the context of swift changes in consumer payment preferences during the pandemic, as well as macro-U.S. economic and consumer demographic trends. While focusing on the BNPL installment loan industry in the U.S., this report also covers the wider context on BNPL financing in Asian, European, and Latin American countries.
This report reviews current U.S. consumer borrowing behaviors; strategic positioning initiatives by financial technology companies (fintechs), banks, card issuers and card networks; and the cross-border rollout of those initiatives across product categories and commerce platforms. It also analyzes each of the principal business models in the industry, examining the potential viability of each model as more players join and bring their own marketing messages, merchant partnerships, and revenue models.
The report provides a complete industry context for BNPL installment lending, an assessment of the strategies and success of extant and new participants in the sector, and a detailed analysis of the opportunities and challenges to those entering or competing in the BNPL sector.
The information contained in this report was obtained from primary and secondary research. Primary research included a proprietary Packaged Facts national online consumer survey fielded in August-September 2021 that measured usage rates for BNPL loans, frequency of use, size of loans, and vendors. With a sample size of 2,000, this survey provides a sample that is census representative of the primary demographic measures of age, gender, geographic region, race/ethnicity, and household income. Within the report, additional consumer surveys from other market research firms as well as BNPL providers are referenced and cited.
Secondary research includes general business and trade publications, management consulting reports, investment analyst reports, company financial filings, and vendor-generated survey findings. Research also relied on U.S. and international governmental, non-profit, and not-for-profit trade reports, country profiles, and payment system analysis.