A $70 Billion Shadow Lending Market
Buy now, pay later originations reached an estimated $70 billion in 2025, up from just $2.3 billion in 2019, a roughly 30-fold increase in six years. That growth rate, approximately 77% compounded annually, makes BNPL one of the fastest-growing consumer credit categories in U.S. history. For context, the entire U.S. personal loan market is roughly $250 billion in outstanding balances, meaning BNPL annual originations are now equivalent to roughly 28% of that established market. Providers like Affirm, Klarna, Afterpay (Block), and PayPal Pay Later have embedded “pay in 4” installment options at checkout across major retailers, while Apple and bank-issued credit cards have added their own BNPL features. The CFPB’s December 2025 market report notes that the five largest BNPL lenders alone originated $24.2 billion in the first half of 2024, up 24% year-over-year from the same period in 2023.
91 Million Users and Counting
An estimated 91.5 million U.S. adults used at least one BNPL service in 2025, up from approximately 8 million in 2019. The adoption curve shows two distinct phases: explosive growth from 2019 to 2022, when user counts nearly doubled each year as COVID-era e-commerce boomed, followed by a plateau around 86–87 million in 2023–2024 as the addressable early-adopter market saturated. The modest growth to 91.5 million in 2025 suggests BNPL is transitioning from a niche fintech feature to a mainstream payment method. The Federal Reserve’s SHED survey independently confirms rising adoption: 15% of U.S. adults reported using BNPL in the prior 12 months as of 2024, up from just 3% in 2019. The gap between the SHED figure (~39 million adults at 15%) and eMarketer’s ~87 million likely reflects differences in how “use” is measured, occasional versus regular users, and whether bank-issued installment plans are included.
Spending Per User Is Accelerating
Average annual BNPL spend per user rose from approximately $280 in 2019 to an estimated $765 in 2025 (a 173% increase. The trajectory wasn’t linear: average spend actually dipped from $491 in 2021 to $448 in 2022, coinciding with the rapid expansion of the user base that year (many new users start with small purchases). Since 2022, average spend has climbed sharply as the user base stabilized and existing users took on more and larger BNPL purchases. The CFPB reports that the average individual BNPL loan has grown from $135 in 2021 to over $150–200 by 2024, and that repeat usage has increased significantly) heavy users now take out 10+ BNPL loans per year. This pattern of rising per-user engagement mirrors the early trajectory of credit card debt, where initial adoption was followed by deepening utilization.
Subprime by Design
BNPL’s credit composition tells a strikingly different story from traditional consumer lending. At peak concentration in 2022, an estimated 46% of BNPL originations went to deep subprime borrowers (VantageScore below 580) and another 16% to subprime borrowers (580–619), meaning roughly 62% of BNPL volume flowed to borrowers who would typically be declined for traditional credit products. By 2025, the deep subprime share has declined modestly to an estimated 38%, with the combined subprime/deep subprime share around 52%. This gradual improvement reflects two forces: tighter underwriting by BNPL providers under regulatory scrutiny, and the entry of higher-credit-quality users through bank-issued BNPL products and Apple Pay Later. Nevertheless, the credit profile remains dramatically skewed compared to credit cards (where subprime accounts for roughly 15–20% of balances) or personal loans (roughly 25%). The CFPB’s January 2025 report notes that BNPL users are 2.5 times more likely to carry credit card balances and 3 times more likely to have used payday loans.
Wealth & Balance Sheet Implications
For high-net-worth households, BNPL is largely irrelevant as a liability category ($765 per user is trivial against a $500K+ net worth. The wealth implications are concentrated at the other end of the spectrum: BNPL disproportionately serves households with thin credit files, low savings, and negative or near-zero net worth. Because BNPL obligations are not consistently reported to credit bureaus and do not appear on standard household balance sheet surveys, they represent a genuine “shadow” liability that is systematically undercounted in Federal Reserve and Census wealth data. At $70 billion in annual originations (with typical 6-week loan duration for pay-in-4 products), the point-in-time outstanding balance is probably $15–25 billion) small relative to $12+ trillion in mortgage debt, but meaningful relative to the balance sheets of the low-wealth households that use it most. Missed BNPL payments are rising: the CFPB found that 10.5% of unique BNPL borrowers were charged a late fee in 2024, up from less than 8% in 2021. For the personal finance community tracking household balance sheets, BNPL is a data gap worth monitoring.
Data Notes & Sources
BNPL origination volume estimates combine data from the CFPB’s December 2025 report on Buy Now, Pay Later Market Trends (which covers the five largest BNPL providers) with broader market scaling estimates from the Richmond Fed’s December 2024 Macro Minute. User counts draw from eMarketer/Insider Intelligence BNPL user forecasts and Capital One Shopping Research. The share-of-adults metric comes from the Federal Reserve’s annual Survey of Household Economics and Decisionmaking (SHED), which asks a nationally representative sample about BNPL usage. Credit score distribution data derives from CFPB’s January 2025 BNPL report, Table 3, which provides VantageScore distributions for 2021 and 2022; values for 2019–2020 and 2023–2025 are estimates based on trend interpolation and should be treated as directional rather than precise. Average spend per user is computed by dividing total origination volume by the number of users. All estimates should be treated with appropriate uncertainty, BNPL is a new and rapidly evolving market with limited standardized reporting.