Study: ‘Buy-now-pay-later’ usage set to explode

A new study from Juniper Research forecasts a bright future for flexible buy-now-pay-later (BNPL) online payments.

According to “Buy Now Pay Later: The Future of E-commerce,” spending via BNPL services which are integrated within e-commerce checkout options, including fixed installment plans and flexible credit accounts, will reach $995 billion in 2026, up from $266 billion in 2021. 

Juniper Research analysis indicates this 274% growth will be fueled by a greater consumer appetite for credit to spread costs, particularly in the wake of personal finance pressure caused by the COVID-19 pandemic. As a result of this dramatic increase in BNPL usage, by 2026 BNPL services are expected to account for over 24% of global e-commerce transactions for physical goods by value, from 9% in 2021.

The research also found that the global number of BNPL users will exceed 1.5 billion in 2026, more than four times the 340 million users expected in 2021. Juniper identified that, while regulations will inevitably place restrictions on services, such as limiting charges or enforcing affordability checks, these changes will not diminish the appeal or growth of the platforms, but merely place them on a more secure footing. 

The report recommends that vendors focus on improving the transparency and use of credit assessment and reporting now to minimize future disruption Leading BNPL providers are identified as including Klarna, PayPal, QuadPay, Sezzle, and Zilch.

“As a tool to split the cost for users, buy-now-pay-later is ideally suited for high-cost items, as it enables users to seamlessly split large costs into smaller, more manageable payments,” said study author Damla Sat. “By 2026, these platforms will increasingly become the norm for lower-cost purchases as well; driven by user demand and e-commerce platform integrations.’