Odd Lots What's Behind the Boom in Buy Now Pay Later
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Sep 4, 2025 Julie Margetta Morgan, President of The Century Foundation and a former CFPB employee, dives into the booming Buy Now, Pay Later (BNPL) market. She explores how BNPL is reshaping consumer credit by offering a modern alternative to traditional financing. Julie discusses the surge in popularity linked to pandemic spending behaviors, the complexities of credit reporting, and concerns around hidden financial risks. Insights into how fintechs are navigating the regulatory landscape and leveraging consumer trends make this conversation particularly eye-opening.
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BNPL Evolved Into Interest Loans
- BNPL marketing masked a shift from fee-free splits to higher-rate installment loans.
- Companies like Affirm now derive most revenue from interest-bearing loans, not just 0% splits.
BNPL Data Is Limited And Sporadic
- Data on BNPL use is sparse and mostly comes from one-off regulatory requests.
- There is no consistent, public stream of BNPL transaction reporting to track systemic risk.
BNPL Volume Jumped Rapidly
- BNPL transaction volume grew sharply from $13.8B in 2020 to about $116B recently.
- The market expansion makes BNPL materially non-trivial compared with credit markets.