U.S. Buy Now Pay Later Market Size, Share & Trends Analysis Report By Channel (Online, POS), By Enterprise Size, By End-use (Retail, Healthcare, Leisure & Entertainment), And Segment Forecasts, 2023 - 2030

Market Size & Trends

The U.S. buy now pay later market size was valued at USD 1.64 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 24.3% from 2023 to 2030. The Buy Now Pay Later (BNPL) market has become increasingly popular in the U.S. in recent years. One of the main drivers of this growth is the convenience it offers to consumers. With BNPL, customers can purchase goods and services without paying the total amount upfront, making it an attractive option for those who may not have the immediate funds to purchase. This allows customers to spread the cost of the purchase over time, making it easier for them to manage their finances and budget effectively.

The U.S. BNPL market has also been driven by changing consumer preferences. Many younger consumers seek alternative payment options, such as BNPL, that better align with their financial habits and preferences. Millennials and Gen Z consumers are known for their aversion to credit cards and debt, making BNPL an attractive option for this demographic. This shift in consumer preferences has helped to drive the industry’s growth.

The evolving competitive landscape of the financial services industry is driving the market’s growth. Traditional lenders and credit card companies face increased competition from fintech startups offering innovative payment solutions. BNPL is one such solution that has emerged as a viable alternative to traditional credit products. This has led to an influx of new entrants in the BNPL space and partnerships between traditional lenders and BNPL providers, further driving the growth of the market.

Regulatory changes also have positively impacted the U.S. buy now pay later industry. The Consumer Financial Protection Bureau (CFPB) has taken a more active role in regulating the industry in recent years. This has led to increased consumer protection measures and a more level playing field for BNPL providers. As a result, consumers are more likely to trust and adopt BNPL as a payment option, further driving the growth.

One major factor hampering the market’s growth is the potential for increased debt and financial instability for consumers who may not fully understand the terms and conditions of their installment plans. Consumers may be enticed by the flexibility and convenience of buy now pay later options without fully considering their ability to repay the loan.

This can lead to missed payments, late fees, and potentially long-term debt. To overcome this restraint, companies in the buy now pay later market can prioritize transparency and consumer education. This can include providing clear and concise information on payment terms, fees, and penalties.

COVID-19 Impact Analysis

The COVID-19 pandemic has positively impacted the U.S. buy now pay later market. The pandemic accelerated the shift toward online shopping, with many consumers purchasing goods and services from the comfort of their homes. BNPL has become a popular option for online shoppers, as it allows them to make purchases without entering their credit card details or providing sensitive financial information to online retailers. This has accelerated the adoption of BNPL in the U.S.

Channel Insights

The online segment accounted for the largest revenue share of more than 65.0% in 2022. The rise of e-commerce and online shopping has made it easier for consumers to access a wide range of products and services from the comfort of their homes. BNPL options have become a popular way for online retailers to attract and retain customers by offering them the flexibility to pay for their purchases in installments. The online channel offers a more seamless and convenient buying experience for consumers, as they can apply for and access BNPL options directly from the retailer's website or application without having to visit a physical store or speak to a salesperson.

The POS segment is anticipated to register significant growth over the forecast period as it allows consumers to take advantage of flexible payment options at the point of purchase. By using a BNPL solution at the POS, customers can make purchases they might not have been able to afford otherwise and pay for them in installments. This has made the POS channel particularly attractive for high-ticket purchases, such as electronics, home appliances, and furniture. In addition, BNPL solutions integrated into the POS process offer consumers a convenient and streamlined checkout experience.

Enterprise Size Insights

The large enterprises segment dominated the U.S. BNPL market in 2022 and accounted for a revenue share of more than 60.0%. Many retailers and e-commerce businesses, particularly those with high average order values, are increasingly offering BNPL options to their customers to increase sales and customer loyalty. Large enterprises have the resources to invest in advanced technology platforms and partnerships with leading BNPL solution providers to offer seamless payment options to their customers. They also have the financial stability and risk management tools to absorb potential losses associated with delayed payments or defaults.

The small & medium enterprises segment is anticipated to register significant growth over the forecast period. With the help of BNPL providers, small & medium enterprises can offer their customers more payment options, which can help boost sales and customer loyalty. In addition, BNPL solutions can help small & medium enterprises compete with larger retailers by offering similar payment options without the need for significant upfront investment in technology and infrastructure, driving innovation and growth. As more small & medium enterprises adopt BNPL solutions, it is expected to fuel the market's growth further and increase the variety of offerings available to consumers.

End-use Insights

The retail segment accounted for the largest revenue share of more than 74.0% in 2022. Retailers are increasingly offering BNPL options at checkout to increase customer conversion rates and provide a more flexible payment option. In addition, the COVID-19 pandemic has led to a significant increase in online shopping, further driving the adoption of BNPL solutions in the retail sector.

Retailers are also partnering with BNPL solution providers to offer customized financing options to their customers. Furthermore, the simplicity and ease of use of BNPL options have made them particularly appealing to younger generations, who prioritize flexibility and convenience in their shopping experience. As a result, the retail end-use segment is expected to continue dominating the U.S. BNPL market over the forecast period.

The healthcare segment is anticipated to register significant growth over the forecast period. Many Americans struggle to pay their medical bills, and with the high deductibles and copays associated with insurance plans, patients are often left with large out-of-pocket expenses. This has led to an increase in the use of BNPL solutions in the healthcare industry, allowing patients to spread out their payments over time instead of paying everything upfront.

In addition, BNPL options provide a more affordable alternative to medical credit cards, often with high-interest rates and fees. As a result, healthcare providers are partnering with BNPL solution providers to offer financing options to their patients, which is driving up demand in the healthcare segment.

Key Companies & Market Share Insights

The growth of the BNPL market in the U.S. has been driven by the increasing instances of partnerships and integrations between BNPL providers and merchants. Many online retailers are now offering BNPL as a payment option at checkout, making it easier for customers to use the service.

In addition, BNPL providers are partnering with traditional lenders and credit card companies, allowing them to expand their reach and offer their services to a wider audience. These partnerships and integrations have helped to drive the growth of the BNPL industry in the U.S. by increasing its accessibility and convenience for consumers.

For instance, In August 2021, Uplift, Inc., a buy now pay later solution provider, announced a new partnership with Tripster, an all-in-one travel booking site. The collaboration aimed to provide its customers with a hassle-free vacation planning experience. The integration of Uplift's buy now pay later solution allows customers to pay for their entire vacation over time, with predictable and manageable monthly installments.

The total cost, along with the monthly payment amount, is displayed at the time of booking, making it easier for customers to budget for and plan their desired vacation. Users can seamlessly access this feature on any platform, whether desktop or mobile. Furthermore, there are no additional fees for late payments or prepayment penalties, and customers can even begin their travel plans before completing their payments. Some prominent players in the U.S. buy now pay later market include:

• Afterpay US Services, LLC

• PayPal Holdings, Inc.

• Affirm, Inc.

• Splitit

• Sezzle

• Perpay, Inc.

• Uplift, Inc.

• Amazon

• Quadpay, Inc.

• Klarna, Inc.

U.S. Buy Now Pay Later Market Report Scope

U.S. Buy Now Pay Later Market Report Segmentation

The report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the U.S. buy now pay later market report based on channel, enterprise size, and end-use:

• Channel Outlook (Revenue, USD Million, 2017 - 2030)

  • Online

  • POS

• Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • Retail

    • Consumer Electronics

    • Fashion & Garment

    • Others

  • Healthcare

  • Leisure & Entertainment

  • Automotive

  • Others