Buy Now Pay Later Market Forecasts $825 Billion Growth by 2028

2025-01-16 economy

New York City, Thursday, 16 January 2025.
The BNPL market is projected to grow by over $825 billion from 2023 to 2028, driven primarily by an increase in luxury product spending.

Unprecedented Growth in BNPL Sector

According to a comprehensive market analysis released on January 16, 2025, the Buy Now Pay Later (BNPL) sector is set to experience extraordinary expansion, with projections indicating growth of USD 826.10 billion between 2023 and 2028, advancing at a remarkable CAGR of 118.6% [1]. This surge is primarily attributed to increased adoption of online payment methods and growing consumer demand for flexible payment options, particularly in the luxury goods sector [1].

Consumer Adoption and Usage Patterns

Recent data from the Consumer Financial Protection Bureau (CFPB) reveals significant shifts in BNPL usage patterns. As of 2022, 21% of consumers utilized BNPL financing, up from 17.6% in 2021 [2]. The average consumer’s engagement has intensified, with annual BNPL originations per borrower increasing from 8.5 in 2021 to 9.5 in 2022 [2]. Notably, 63% of users maintained multiple active loans simultaneously, highlighting the growing integration of BNPL into consumer spending habits [2].

Market Evolution and Financial Inclusion

The BNPL sector is experiencing rapid transformation, with major players like Klarna preparing for significant market moves. Klarna is currently organizing a portfolio sale of U.S. ‘Pay in 4’ loans in preparation for an anticipated 2025 IPO [4]. The embedded finance market, which encompasses BNPL services, is projected to reach $690.386 billion by 2030 [7], indicating substantial growth potential. Consumer satisfaction remains high, with 76% of BNPL users reporting positive experiences with these payment plans [4].

Regulatory Oversight and Financial Education

As the market expands, regulatory bodies are increasing their focus on consumer protection. The CFPB has implemented new guidelines, including FAQs on Regulation Z requirements for BNPL products in September 2024 [2]. Industry players are also taking proactive steps, as exemplified by Sezzle’s January 14, 2025 launch of Money IQ, an innovative financial education program integrated within their BNPL platform [8]. These initiatives aim to promote responsible lending practices while maintaining the sector’s growth trajectory.

Sources

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