Comprehensive Snapshot for Buy Now Pay Later Market, Including Country and Segment Analysis in Brief.
Industry: IT and Telecommunication
Delivery Timelines: Please Contact Sales
Published Date: May-2025
Format: PPT*, PDF, EXCEL
Number of Pages: 160
ID: PMRREP35349
The global buy now pay later market size is predicted to reach US$ 196.0 Bn in 2032 from US$ 44.7 Bn in 2025. It will likely witness a CAGR of around 23.8% in the forecast period between 2025 and 2032.
The market is expected to be propelled by the rising preference for hassle-free payment options among modern consumers, finds a Persistence Market Research report. Buy Now Pay Later (BNPL) services often provide the ease of burden from upfront charges and high financial flexibility, enabling consumers to buy a product without making immediate payment. The e-commerce boom has also surged demand as BNPL service providers are integrating their platforms into online checkout processes, providing a quick payment experience.
Key Industry Highlights
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Global Market Attribute |
Key Insights |
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Buy Now Pay Later Market Size (2025E) |
US$ 44.7 Bn |
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Market Value Forecast (2032F) |
US$ 196.0 Bn |
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Projected Growth (CAGR 2025 to 2032) |
23.8% |
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Historical Market Growth (CAGR 2019 to 2024) |
20.6% |
The appeal of small, interest-free installments, which provide a debt-light alternative to conventional credit cards, is expected to spur the buy now pay later market growth through 2032. Consumers often turn to interest-free options in periods marked by stagnant wage growth and high inflation to manage short-term cash flow without incurring high borrowing costs. As per a 2024 online published data, nearly 65% of BNPL users mentioned that they chose the method as it allowed them to afford products without paying interest. It was especially evident in segments, including home improvement, electronics, and fashion. The model has resonated with budget-conscious consumers, specifically Gen Z and millennials, who are more averse to credit card debt.
The low-friction fast approval process is further augmenting BNPL adoption globally. Multiple BNPL platforms rely on alternative data, such as purchase behavior or perform soft credit checks, rather than formal credit histories. This enables them to approve transactions within seconds, making these attractive at the point of sale, both in-store and online. BNPL also provides a near-instant path to purchase. Klarna’s ‘Pay in 3’ product, for instance, splits payments over three months with no interest. It reported a 35% surge in use across U.K.-based retailers in late 2023, owing to its quick eligibility assessment and smooth checkout experience.
Overspending is becoming a significant concern for BNPL users, mainly due to the seamless mobile payment transaction option. These transactions often lack real-time spending limits or credit checks associated with a comprehensive credit history. This makes it convenient for users, especially the younger demographic, to accumulate several active payment plans across different platforms. A 2024 survey by LendingTree, for example, found that approximately 43% of BNPL users missed at least one payment, with Gen Z and millennials being the most affected. This behavior often attracts regulatory attention and leads to surging defaults.
Complicated returns and refunds are also a couple of other key concerns, primarily because BNPL providers come between the customer and the merchant, adding a third layer to an existing process. When a product is returned, the refund does not always sync immediately with the BNPL provider’s system. It enables users to continue making installment payments even after initiating a return. A 2023 report by Citizens Advice U.K. pointed out that more than 52% of BNPL users faced confusion or delays when trying to get refunds, specifically when returning products purchased online. This has resulted in consumer frustration and negative sentiment, especially in Australia and the U.K., where e-commerce return rates are high.
?The healthcare sector is emerging as a high-value opportunity for BNPL providers, backed by the surging insurance coverage gaps and out-of-pocket medical expenses, specifically in the U.S. Patients are hence inclining toward BNPL for elective procedures, including mental health therapy, fertility treatments, dermatology, and dental work, which are often not fully covered by insurance. The integration of BNPL solutions with mobile payment technologies has further accelerated adoption by enabling patients to access installment options seamlessly at the point of care.
Affirm, for example, initiated collaborations with healthcare providers such as Sunbit and Walnut in 2023 to provide installment options at the point of care. Sunbit reported that its BNPL platform was available in more than 20,000 medical and dental locations across the U.S. by the end of 2023. It enabled patients to split bills into 6- to 24-month interest-free payments. This helped lower the chances of appointment cancellations due to upfront cost issues, enhancing accessibility for patients and cash flow for providers.
Based on channel, the market is segregated into online and Point of Sale (POS). Among these, the online segment is predicted to dominate with a share of nearly 66.2% in 2025. This is attributed to the smooth integration of BNPL with e-commerce platforms and the rising preference for mobile-first shopping experiences. BNPL services are usually embedded directly into checkout flows, boosting conversion rates and creating minimal disruption for customers. For instance, Shopify reported in its Q1 2024 earnings that merchants using Shop Pay Installments saw a 28% higher cart conversion rate compared to those who did not provide BNPL. This ease of integration enabled retailers to attract customers who are otherwise hesitant to make full upfront payments, mainly for high-ticket items such as home goods and electronics.
POS channel, on the other hand, is poised to witness a significant CAGR from 2025 to 2032. This is owing to the surging adoption of BNPL by physical retailers looking to replicate the flexible checkout experience of e-commerce. Retailers in segments such as automotive accessories, furniture, and electronics are integrating BNPL solutions directly into their in-store payment systems to reduce friction at checkout and encourage large basket sizes. A significant enabler of this trend is the utilization of powered smart cards, enabling users to initiate BNPL transactions in-store without the requirement of a mobile app.
By end-use, the market is divided into retail, healthcare, leisure and entertainment, and automotive. Out of these, the retail segment will likely outpace the others with about 72.5% of the buy now pay later market share in 2025. This is due to the rapid expansion of BNPL collaborations with leading e-commerce platforms and retail brands. Amazon, for example, extended its collaboration with Affirm in 2023 to include longer payment tenures and more product categories, such as options for items up to US$ 10,000. Similarly, Apple unveiled Apple Pay Later in the U.S., integrating BNPL directly into its iPhone Wallet for retail purchases.
Automotive, on the other hand, will likely witness considerable growth through 2032, owing to high demand for flexible financing options for expensive services such as accessories, maintenance, parts replacement, and repairs. Vehicle ownership costs have skyrocketed worldwide, making installment-based payments highly attractive for consumers facing urgent or unplanned expenses. In addition, the adoption of BNPL across aftermarket retailers and dealership service departments is expected to create lucrative avenues. Companies, including DigniFi, for example, have partnered with tire retailers and auto service chains in the U.S. to integrate BNPL at the point of sale. DigniFi broadened its network to include more than 6,000 auto service providers by late 2023, providing customers with the ability to finance repairs or upgrades with no hard credit checks.
In 2025, North America is anticipated to account for a share of approximately 30.6%. The U.S. buy now pay later market is speculated to remain at the forefront of growth in the foreseeable future. This is attributed to increasing demand for interest-free, transparent payment alternatives and high credit card debt levels. As per a 2024 survey by the Consumer Financial Protection Bureau (CFPB), more than 37% of adults in the U.S. had utilized a BNPL service at least once in the past year. Personal care, electronics, and fashion remain the most common purchase categories.
The U.S. is, however, facing surging compliance pressure. The CFPB, for example, proposed new guidelines in March 2024. These require BNPL providers to adhere to the same refund rules and dispute resolution as credit card issuers. This move focuses on addressing increasing concerns about overspending and opaque return processes. Credit reporting agencies, including TransUnion and Equifax, have also started incorporating BNPL repayment data into credit scores. As digital transactions increase, providers and regulators are placing greater emphasis on payment security to prevent fraud and protect consumer data, mainly with BNPL becoming more embedded in e-commerce. This marks a significant shift that will likely help strengthen responsible lending and impact user behavior.
In Europe, the market is anticipated to rise across the U.K., Sweden, and Germany. Worldpay found that the continent accounted for around 30% of the global BNPL transaction value in 2024 alone. This surging adoption is primarily accelerated by younger consumers demanding alternatives to conventional credit and retailers integrating flexible payment options to improve average order values. Klarna, headquartered in Sweden, is considered one of the most prominent BNPL providers in Europe.
The region is, however, witnessing strict regulatory oversight. The Financial Conduct Authority (FCA) in the U.K. has started enforcing tight advertising and affordability checks for BNPL providers as of mid-2024. This is further increasing concerns about the normalization of borrowing for everyday purchases and high household debt. Innovations are underway to address these challenges while extending services. Klarna, for instance, introduced a sustainability score feature across various countries in Europe. It enables customers to see the environmental impact of their purchases. Revolut, a U.K.-based fintech, also launched a BNPL feature in its mobile banking app. This allows users to split payments at the point of sale across both offline and online retailers through virtual payment (POS) terminals.
In Asia Pacific, Australia is anticipated to see steady growth as BNPL services have become mainstream in the country. Concerns over consumer debt, however, have bolstered regulatory changes. As of June 2024, the government of Australia rolled out legislation requiring BNPL providers to conduct credit checks and hold the country’s credit license. It categorized BNPL under low-cost credit to improve consumer protection and boost embedded security.
In Southeast Asia, apps such as Shopee, Gojek, and Grab integrate BNPL services. These enable users to access installment payments across multiple services, right from e-commerce to ride-hailing. Regulatory responses vary across the region. Malaysia's Consumer Credit Commission, for example, introduced measures in March 2025 to ensure responsible lending, focusing on the predominantly young BNPL user base earning below MYR5,000 monthly. Indonesia, on the other hand, plans to roll out stringent norms by January 2027, including income and age requirements for BNPL users, in response to surging non-performing financing rates.
The global buy now pay later market is highly competitive, with the presence of several e-commerce platforms, well-established payment processors, conventional banks, and fintech start-ups. They are all focusing on diverse monetization strategies and geographic specialization. For instance, PayPal’s service runs on its existing wide merchant network and user base, providing it with a cross-category advantage that small-scale companies often lack. Afterpay uses its deep integration with retailers in the U.S. and Australia, whereas Klarna engages in brand partnerships and has a robust presence in Europe.
Strategic partnerships and consolidation have also transformed the market in recent years. Affirm’s partnerships with Shopify and Amazon as well as Block’s acquisition of Afterpay highlight how fintechs are forming alliances to extend reach and generate high shares. These integrations enable them to eliminate conventional onboarding hurdles and obtain exposure to large merchant and customer ecosystems.
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Report Attribute |
Details |
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Historical Data/Actuals |
2019 - 2024 |
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Forecast Period |
2025 - 2032 |
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Market Analysis Units |
Value: US$ Bn/Mn, Volume: As Applicable |
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Geographical Coverage |
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Segmental Coverage |
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Competitive Analysis |
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Report Highlights |
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Customization and Pricing |
Available upon request |
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The market is projected to reach US$ 44.7 Bn in 2025.
The booming e-commerce sector and rising demand for interest-free payment options are the key market drivers.
The market is poised to witness a CAGR of 23.8% from 2025 to 2032.
Rising preference for BNPL services in the healthcare sector and surging demand from the younger demographic are key market opportunities.
Afterpay Limited, Affirm, Inc., and PayPal Holdings, Inc. are a few key market players.
