Buy Now, Pay Later Loans Pressure Traditional Consumer Finance

Press Release
Oct 4, 2021

ROCKVILLE MD, October 4, 2021 – For traditional finance companies and banks, Buy Now, Pay Later (BNPL) or Point-of-Sale Installment Loan (POSIL) financing requires adopting a next-gen mindset of innovation. Competing with fintechs for installment lending market share and customer retention forces traditional lenders—reliant on decades of consistent income from credit card unit—to rethink their consumer credit business models.

In its just-released Buy Now, Pay Later: Point of Sale Installment Loans (September 2021) report, Packaged Facts estimates that the BNPL installment lending market in the U.S. grew to $250 billion in 2020, for a compound annual growth rate (CAGR) of 33% over the previous five-year period.

While there had been concern that the economic uncertainty attendant with the global pandemic would adversely affect the BNPL installment loan industry, it did not, according to report author Elizabeth Rowe.

Instead, consumers shifted much of their retail spend to debit cards and BNPL installment loans as they paid down credit card debt and reined in household spending, placing guardrails around their budgets. The other key beneficiaries of changing consumer payment preferences were debit card servicers.

A proprietary Packaged Facts August-September 2021 online survey conducted for this report shows that 34% of the Internet-active U.S. adult sample of 2,000 have used Buy Now, Pay Later loans, nearly doubling the 18% figure from an earlier February-March 2020 survey. Almost half (47%) of recent BNPL loan customers have used PayPal Credit as a provider. Affirm, Afterpay, and Klarna also garner significant shares.

While “BNPL” and “POSIL” lending are terms used globally, the actual products available in individual nations and/or geopolitical territories reflect their specific characteristics. Each market’s solutions are customized for consumers’ household wealth, their experiences with consumer credit, their preferences for specific methods of payments, and the population’s overall adoption and use of the Internet—especially mobile commerce. 

In some less prosperous markets, BNPL finance is a mature mainstay of consumer credit. In the wealthiest economies, dynamic levels of fintech ingenuity and competition have helped BNPL financing installment lending grow faster than all other consumer credit products, and twice as fast as credit cards. That’s why this credit category is hot. 

About Packaged Facts

Packaged Facts, a division of, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, the food and beverage market, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through

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