The Buy Now, Pay Later (BNPL) model was introduced in the early 2000s with services like PayPal Credit and later popularized by Klarna, Affirm, and Afterpay. This innovative payment model, offering short-term, interest-free installment plans, has redefined convenience in eCommerce and retail. The global BNPL market is projected to reach $560.1 billion in 2025, a 13.7% year-over-year increase, with user adoption accelerating toward 900 million by 2027.

Yet, this growth comes with risks. Around 34–41% of users miss payments, raising concerns about rising consumer debt. Regulators in key markets are stepping up oversight with a push for clearer disclosures and affordability checks. Merchants also face operational challenges, from higher return rates to complex chargeback management. These pressures raise serious questions about BNPL’s long-term viability amid growing financial and regulatory risks.

Building on our chargeback statistics, this report delivers the latest BNPL stats and trends for 2025, including market size, user adoption, regional growth, regulatory shifts, and merchant impacts. Please credit Chargeflow and link to this article if using any data presented here.

Top Line BNPL Stats for 2025

1. The global BNPL market is projected to reach $560.1 billion in 2025, reflecting a 13.7% year-over-year increase in gross merchandise volume (GMV).
2. User adoption of BNPL is accelerating, projected to surpass 900 million globally by 2027, up from 360 million in 2022—a 157% increase.
3. Approximately 34–41% of BNPL users reported making late payments in the past year, with Gen Z users showing a higher rate of 51%, raising significant concerns about consumer debt and delinquency.
4. BNPL can increase average order values for merchants by 20–40%, and its adoption often substantially boosts conversion rates.
5. BNPL accounts for approximately 36.4% of global provider revenue in the Asia-Pacific region, with regional GMV estimated at $211.7 billion in 2025.
6. Research shows BNPL users spend around 6% more online than non-BNPL shoppers, with omnichannel BNPL users spending 72% more per transaction than other online shoppers.

Buy Now, Pay Later Evolution, Market Size, and Growth Statistics

Buy Now, Pay Later has its roots in the 1930s layaway programs and has since transformed into today’s instant-approved, digital payment solutions. The program was once limited to big-ticket items at its inception in 2019.

However, BNPL is now commonly used for everyday purchases, ranging from groceries and entertainment to personal services. BNPL has also expanded into business segments beyond retail, such as travel, healthcare, and home improvements.

For merchants, the appeal is clear. Studies show BNPL can increase average order values by 20-40%. It can equally meaningfully lift conversion rates. Customers are more likely to complete a purchase when flexible payment options are available.

On the consumer side, BNPL adoption is driven by both economic pressures and psychology. In an era of rising living costs, flexible installment options are seen as safer and more manageable than traditional credit. Research shows that BNPL users spend around 6% more than non-BNPL shoppers, a boost that merchants value.

Yet, the real accelerator is financial psychology. Spreading payments makes purchases feel smaller, less risky, and more attainable. This resonates especially with younger generations who are wary of credit card debt but comfortable with digital tools.

• Measured by gross merchandise volume (GMV), the global BNPL market is valued at approximately $560.1 billion in 2025, reflecting 13.7% year-over-year growth.
  1. This builds on the sector’s strong momentum, which delivered a 21.7% CAGR between 2021 and 2024, and is forecast to expand at a 10.2% CAGR from 2025 through 2030.

• When measured by provider revenues, the fees and earnings generated by BNPL companies, the market is significantly smaller.
  1. Global BNPL revenues are projected at $23.37 billion in 2025, up from $19.22 billion in 2024, and are expected to rise to $28.44 billion in 2026 before reaching nearly $83.36 billion by 2034.

• Asia-Pacific is the largest BNPL region by both provider revenue and GMV in 2024, accounting for about 36.4% of global BNPL revenue and leading in total transaction value (GMV).
  1. Asia-Pacific’s BNPL GMV was estimated at US$211.7B in 2025, projected to reach US$358.6B by 2030 (CAGR ~11.1% for GMV; revenue CAGR ~15.1–15.6%).

• In 2024, North America (primarily the U.S.) accounted for roughly 29–32% of global BNPL revenue, consistently ranking among the top regions by provider earnings. The U.S. BNPL users grew from 86.5 million in 2024 to a projected 91.5 million in 2025, reflecting annual growth of about 6–7%.
  1. By GMV, however, the region often trails Asia-Pacific, reflecting differences in transaction volume versus monetization.
  2. Growth in North America is fueled by strong e-commerce adoption and fintech–retailer partnerships, with revenue projected to expand at ~15% annually, while GMV growth varies depending on market definitions and coverage.

• Europe accounted for ~25.9% global BNPL revenue share in 2024; European GMV estimated at US$191.3B in 2025, forecast to US$293.7B in 2030 (GMV CAGR 9–12%, revenue CAGR ranges from 9–12%).
• Sweden and other Nordics have the highest BNPL penetration within e-commerce payments, with Sweden reaching 23–24% of e-commerce transactions conducted via BNPL.
• Latin America and MEA (Middle East & Africa) rank much smaller by current share (single digits of revenue/GMV), yet display the fastest growth rates, often forecast at 20%+ CAGR in market reports.
• Africa’s BNPL market, while small ($5.34B in 2025), is forecast to outpace global average CAGRs (>14%) due to rapid financial inclusion and fintech innovation.
• The number of BNPL users will surpass 900 million globally by 2027, increasing from 360 million in 2022, a substantial upside of 157%.
  1. This includes both one-time and recurring users, and the most active usage remains concentrated among younger and mid-income consumers.

• Empirical estimates indicate an increase of 6.42% in online spending by customers adopting BNPL based on retailer data; rounded to ~6.4% in summaries.
• 21% of consumers with a credit record financed at least one purchase at one of the six major providers (Affirm, Afterpay, Klarna, PayPal, Sezzle, Zip) using BNPL in 2022, the most recent year of data, with the average (median) purchase amount being $142 ($108).
  1. The average annual Buy Now, Pay Later originations per borrower grew from 8.5 in 2021 to 9.5 in 2022.
  2. 63% of BNPL borrowers originated multiple simultaneous loans in 2022, and 33% did so across multiple BNPL firms.
  3. BNPL application volumes rose dramatically, from daily averages of about 100,000 in 2019 to over 1 million per day in 2022, with significant spikes during the holiday season (e.g., Black Friday to Christmas Eve).

BNPL and eCommerce

Despite rapid expansion, BNPL’s share of global eCommerce retail payments is still relatively modest compared to credit/debit card and digital wallet payments. But its share of eCommerce payments in key markets (e.g., Sweden, Australia) has reached double digits.

• Despite rapid growth, BNPL’s global share of eCommerce retail payments remains noticeably smaller than that of credit cards, debit cards, and digital wallets. Globally, retail accounts for 73% BNPL revenue.
• The global BNPL platform market size was valued at $6.13 billion in 2022 and is expected to grow at a compound annual growth rate of 26.1% from 2023 to 2030.
• In Northwestern Europe, especially Sweden and other Nordic countries, BNPL accounts for more than 10% of eCommerce payment volumes—reaching double-digit market shares.
• Australia also saw BNPL reach a significant share of total eCommerce payments, with its market penetration among the highest globally.
• In fast-growing Asian eCommerce markets (such as Indonesia, Malaysia, and Vietnam), the absolute number of BNPL users is high, but BNPL’s percentage share of total eCommerce payments remains below that of mature markets like Sweden.
• Omnichannel BNPL users spend on average 72% more per transaction than other online shoppers, highlighting the model’s strong impact on basket size.
• Up to 40% of BNPL sales come from new customers to the retailer.
• BNPL adoption raises basket sizes, typically 15–40% depending on merchant and sector; merchants often report lower abandonment after BNPL is offered; some merchants observed a 10–15% uplift in repeat customers when BNPL was available.

• BNPL integration can boost online checkout conversion by up to ~30% in some tests.
• Discretionary verticals (fashion, electronics, homeware) see the strongest AOV and conversion uplift.

• BNPL users spend ~6.4% more online than non-users in certain retailer datasets.

BNPL adoption is highest among Gen Z and Millennials, who report avoiding credit cards. A significant share of BNPL orders come from smartphones and apps, driving mobile commerce. As indicated earlier, BNPL applications surge in peak shopping periods, with providers reporting sharp seasonal spikes.

BNPL Provider Landscape and Innovations

Klarna:

• Reported $2.81 billion in revenue for 2024, up 24% YoY from $2.28 billion.
• Integrated with 790,000 merchant websites worldwide as of Q2 2025.
• Klarna has consistently grown its gross merchandise volume, reaching $105 billion in 2024—up 9.3% year over year.
• Klarna surged 30% in its highly anticipated New York debut, opening at $52 versus the IPO price of $40 and valuing the Swedish fintech at $19.65 billion.

Affirm:

• Delivered 46% YoY revenue growth in 2024, reaching $2.32 billion, outpacing peers.
• As of the most recent reported data for Affirm Holdings, Inc. (fiscal year ended June 30, 2025), Affirm has 377,000 active merchants in its global network.
• Affirm expanded BNPL to Amazon Business in 2023 (rolled out November 2, fully available by Black Friday), enhancing checkout for millions of small business users with flexible pay-over-time options, building on its 2021 Amazon.com integration.

Afterpay (Block, Inc.):

• Contributed $1.04 billion in revenue to Block in 2024, up 28% year-over-year.
• Afterpay Card launched in 20 states and Washington D.C. in February 2025. Now operates as "Cash App Afterpay" within Block's ecosystem.
• As of Q3 2024, Afterpay reported over 348,000 merchants globally and operates in at least five countries, including Australia, the United States, the United Kingdom, Canada, and New Zealand. Australia remains a core market for Afterpay.

PayPal (Pay in 4):

• In 2024, PayPal processed more than $33 billion in global BNPL volume, a 21% increase over the previous year.
• PayPal’s BNPL is available to its 400 million+ active users in over 200 markets worldwide. In 2025, 68% of surveyed U.S. online shoppers reported having used PayPal’s BNPL service at least once, placing it among the most widely adopted BNPL brands in the country.
• PayPal recently announced a $7 billion sale of the U.S. BNPL receivables to Blue Owl Capital.
• In consumer studies, PayPal BNPL options are cited as preferred for their transparency, lack of late fees (in several markets), and familiarity.

Notable Recent BNPL Innovations

1. AI-Driven Underwriting: Leading providers (e.g., Affirm, Klarna) use machine learning for real-time underwriting at checkout (decisions typically take seconds), which several merchant tests show can materially improve conversion (provider case studies report uplifts up to ~30% in specific tests).
2. Embedded BNPL: BNPL is increasingly embedded in super-apps and neobanks (e.g., Revolut’s Pay Later, Citi’s Flex Pay on Apple Pay); smaller third-party BNPL/advance apps (e.g., Gerald) also operate alongside neobank offerings.
3. Physical/Digital Hybrid Smart Cards: Providers are piloting hybrid BNPL cards: Klarna piloted a Visa-backed flexible debit/BNPL card in mid-2025, and Afterpay began Cash App rollouts in the U.S.; these cards aim to enable BNPL at the large Visa merchant network, though optional device/security features vary by product.
4. Enhanced Fraud/Risk Detection: Providers are deploying AI-based fraud and risk models and report reductions in fraud/losses in vendor case studies; specific improvement magnitudes vary by provider.
5. Personalized BNPL Plans: Providers increasingly use data and AI to personalize installment plans and approvals; this has expanded approved coverage for lower-score consumers in some provider programs (approval rates vary by provider and cohort).
6. Bank and Traditional Finance Integration: Major banks have rolled pay-over-time features into card platforms (e.g., Citi Flex Pay, Chase ‘Travel Now, Pay Later’), extending point-of-sale installment options; aggregate credit-line impacts are material but not publicly attributable solely to these features.
7. Mobile Wallet and In-Store Expansion: BNPL is expanding into mobile wallets and tap-to-pay flows (e.g., Citi Flex Pay on Apple Pay, Visa’s flexible credential partnerships).

Buy Now, Pay Later & Chargebacks

BNPL may drive order values and conversions. However, the complex dispute environments mean that dealing with chargebacks can be even messier.

Traditional card disputes are predominantly bilateral: You vs. the issuer. BNPL chargebacks are a multilateral process involving the consumer, the BNPL provider, and the card network. Liability shifts are unclear, procedures are often inconsistent, and regulatory protections are not applicable.

The result? Merchants absorb the cost of confusion.

Why BNPL Disputes Spiral Out of Control

• Disintermediation: Consumers often bypass BNPL platforms and file disputes directly with their card issuers, leaving you to face penalties without the BNPL provider’s support.
• Provider Silos: Each BNPL has its distinct dispute framework, timelines, and evidence standards. These may be different from those of the card networks.
• Fragmented Liability: When a transaction is challenged, merchants are left guessing whether the provider, the card issuer, or they themselves are on the hook.

This structural fragmentation makes BNPL chargebacks more costly and time-intensive than card disputes. That’s even before fraud or online shoplifters are factored in.

Why Standard Tools Underperform

Most chargeback management platforms are optimized for Visa/Mastercard rails. They don’t recognize BNPL identifiers, miss provider deadlines, and apply generic evidence templates that get rejected automatically. For merchants running at scale, these inefficiencies quietly compound into significant, uncontested losses.

That’s where Chargeflow comes in. The system:

• Auto-detects BNPL transactions to trigger the correct dispute workflow instantly.
• Maps provider-specific rules to ensure filings meet exact evidence and deadline standards.
• Maintains multi-party documentation trails. Both issuers and BNPL providers have what they need, without manual chasing.
• Runs on intelligent automation, scaling dispute handling without adding operational drag.

The outcome is fewer losses, higher recoveries, and restored margins in a payment space that’s becoming more complicated.

BNPL Risks, Challenges, and Regulatory Shifts

The rapid expansion of BNPL brings notable consumer risks, profitability hurdles, and active regulatory transformations, especially as global usage continues to climb.

Risks

• Delinquency vs. Defaults: While CFPB data shows average BNPL default rates below 3% (2019–2022; credit card defaults ~10%), approximately 41% of BNPL users reported making late payments in the past year. This is a clear sign that many face cash-flow stress, even if outright defaults remain low.
• Overextension & Subprime Borrowers: 61% of U.S. BNPL borrowers are in subprime or deep subprime categories, layering BNPL on top of high credit card utilization (average 60–66%, versus 34% for non-BNPL users).
• Loan Stacking/Hidden Debt: 63% of BNPL borrowers have multiple loans active at once, with 33% holding them across several providers, making true debt exposure invisible to many lenders.
• Impulse-Driven Behavior: BNPL is often used for discretionary spending (think: fashion, electronics, and leisure) raising the risk of regret-driven disputes and chargebacks.
• Late Fee Transparency: Nearly 1 in 5 subprime BNPL users incur late fees, and a substantial share are unaware of penalty terms.

Challenges

• Provider Profitability Pressure: Most major BNPL firms (e.g., Klarna, Affirm) remain unprofitable, challenged by rising credit losses, funding costs, and competitive pressures.
• Merchant Costs: BNPL transaction fees range from 2–8% (average ~4–6%), exceeding typical credit card fees (about 2%). Shopify’s Shop Pay BNPL reportedly charges some merchants up to 8.99%.
• Operational Complexity: Disputes can be complicated as BNPL products involve a three-way relationship between consumer, merchant, and provider, requiring careful documentation and liability management.
• Revenue Concentration: In some retail sectors, BNPL drives 20%+ of sales, making merchants vulnerable to regulatory restrictions or third-party provider issues.
• Economic Sensitivity: BNPL’s short repayment cycle (4–6 weeks) amplifies borrower risk in periods of inflation or income volatility, especially among heavy users (22+ loans/year).

Regulatory Shifts

• United States (CFPB, 2025): New rules propose mandatory credit bureau reporting for BNPL, clearer disclosures, and enhanced consumer protections to surface hidden debt and strengthen oversight.
• European Union: The revised Consumer Credit Directive (2025) will bring BNPL under regulated credit, requiring affordability checks and standardized transparency for all member states.
• United Kingdom: FCA regulation (2025) mandates proportionate creditworthiness assessments, fair marketing, and clear disclosures as part of broader consumer credit reforms.
• Australia: Treasury confirmed BNPL will fall under the National Consumer Credit Protection Act by 2026, ending the previous exemption for BNPL providers.
• Global Outlook: Regulators globally now treat BNPL as “credit in disguise,” aiming to curb hidden debt, underreported obligations, and systemic consumer overleveraging.

Additional Considerations

• Many BNPL users lack full understanding of product terms, fees, and credit reporting implications, raising the need for educational outreach.
• Providers are responding with stricter underwriting, more frequent late fee waivers, and better consumer disclosures in anticipation of new rules.
• BNPL’s share of total household debt remains modest for now, but rapid growth and stacking create future risk exposure, especially in segments with minimal financial literacy or volatile incomes.

Emerging BNPL Trends to Watch

1) Credit Bureau Integration:

• Regulators in the U.S., U.K., and EU are pushing for BNPL loans to be reported to credit bureaus.
• This will reduce "hidden debt” but could also limit BNPL adoption among subprime borrowers, a big share of today’s users.

2) Profitability Pressure and Fee Diversification:

• Providers are under pressure to achieve profitability after years of growth.
• Expect more consumer fees (late fees, subscription models) and merchant fee restructuring as companies like Klarna, Affirm, and Afterpay move away from pure transaction-based revenue.

3) Expansion into Essential Spending:

• BNPL is shifting beyond discretionary retail into groceries, healthcare, education, and travel, making repayment discipline more critical.
• This broadening use case also raises new regulatory red flags around consumer overextension.

4) AI-Powered Risk and Fraud Management:

• AI underwriting and fraud detection models are getting sharper, enabling real-time credit checks in milliseconds.
• This is essential as stolen card fraud and friendly fraud remain top merchant risks.

5) Omnichannel and In-Store Buy Now, Pay Later:

• BNPL is moving from online checkout to in-store POS terminals and mobile wallets (Apple Pay, Google Pay).
• Physical BNPL “smart cards” (like Klarna Card, Afterpay Card) bridge online and offline, opening access to millions of merchants.

6) Consolidation and Partnerships:

• Expect more mergers, acquisitions, and bank partnerships as competition intensifies and compliance costs rise.
• Example: Affirm with Amazon; banks embedding BNPL into credit cards (Chase, Citi).

7) Regulation as a Market Shaper:

• 2025–2026 will bring decisive regulatoring harmonization, especially in the U.S., EU, and Australia.
• Compliance will become a competitive advantage, squeezing out smaller, undercapitalized BNPL players.

8) Consumer Behavior Shift:

• Younger consumers (Gen Z, Millennials) continue driving adoption, but heavy usage and late rates are triggering trust and sustainability concerns.
• High earners now increasingly use BNPL, challenging the idea that it’s just a “lower-income” tool.

⚠️Takeaway: The future of BNPL will be defined by whether providers can balance profitable growth, manage rising chargeback fraud and regulatory oversight, and continue expanding into new spending categories without amplifying consumer debt risk.

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DISCLAIMER:

This research provides general and factual information as of the time of writing. Chargeflow and its operators/employees assume no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.

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Sources:

1. Global Data
2. Fintech Futures
3. Globe News Wire
4. Precedence Research
5. Global View Research
6. Yahoo
7. Yahoo
8. Statista
9. Research and Markets
10. Juniper Research
11. Grand View Research
12. Science Direct
13. Consumer Financial Protection Bureau
14. HBS
15. eCompany
16. Globe News Wire
17. PwC
18. Lending Tree
19. Finance Middle East
20. Treasury dot Gov dot AU
21. Nasdaq
22. Morgan Stanley
23. Klarna
24. SEC
25. Reuters
26. Affirm
27. AfterPay
28. PayPal
29. Deloitte
30. JayWing Risk
31. Richmond Federal Reserve Bank
32. The Payments Association
33. Publicis Sapient
34. Digital Silk
35. AFM (Dutch Authority for the Financial Markets)

More Statistics:

1. Shopify Statistics
2. BigCommerce Statistics
3. Stripe Statistics
4. PayPal Statistics
5. eBay Statistics