Buy Now, Pay Later Market Reaches $157 Billion
A Federal Reserve analysis estimates that Buy Now, Pay Later (BNPL) services originated $156.7 billion in U.S. consumer credit in 2025. These financing options are now shaping purchasing decisions and business offerings.
The U.S. market for "buy now, pay later" (BNPL) services generated an estimated $156.7 billion in consumer credit in 2025, according to a Federal Reserve analysis. This represents a significant increase, with "pay-in-four" plans alone accounting for nearly 80 percent more than measured by the Consumer Financial Protection Bureau in 2023.
These financing options are increasingly influencing consumer affordability perceptions, purchasing timing, and commitment levels. BNPL is now viewed as an integral part of a business's overall product offering, rather than merely a final step at checkout.
The Federal Reserve study examined six major BNPL providers: Affirm, Afterpay (owned by Block), Klarna, PayPal, Sezzle, and Zip. Their product portfolios vary significantly. For instance, "pay-in-four" plans constituted 15 percent of Affirm's total originations, but reached 100 percent for Sezzle.
Across the analyzed providers, 63 percent of their 2025 originations carried a 0% Annual Percentage Rate (APR), while 37 percent included interest. This means the same BNPL label can encompass both interest-free, short-term installment plans and longer-term loans with interest, potentially leading to consumer confusion.