May 2024
Buy now, pay later: Spreading the pay(n)?
BNPL (buy now, pay later) momentum is losing steam, but there is some increase in the share of heavy users.
Key takeaways
- Adoption of buy now, pay later (BNPL) is slowing year-over-year (YoY), with the share of Bank of America customers with a BNPL payment increasing by only half a percentage point (pp) in March 2024 compared to a one pp increase the previous year.
- Millennials comprised the largest share of BNPL households in March, followed by Gen Xers, according to Bank of America internal data. Overall, nearly half of households that used this payment method in March 2024 earned less than $50K per year.
- Households with heavy BNPL usage appear to have higher levels of total credit and debit card retail spending relative to March 2019, but the fact that these households are a small share of the total population may limit tailwinds to consumer spending.
- Lower deposits and rising average credit card balances for medium to heavy BNPL users might pose an increasing risk. Although undersized credit card balances and slowing BNPL adoption may temper these risks.
Read our full analysis for a more in-depth look at these trends.
