蘑菇AV

How we got here: Apple Pay started partnering with BNPL players like Affirm shortly before shutting down its in-house Apple Pay Later offering. At the time, Apple said it planned to offer card-linked installments from Synchrony, Citi, and Fiserv. Apple Pay has since added Klarna as a BNPL option as well.

BNPL providers will race to adopt the technology. Afterpay and Klarna will do so by the end of the year. Both need to penetrate in-store sales, are building out debit card programs to do so, and would benefit from the extra interchange. This will help drive BNPL transaction value. Click here to view our full forecast for US BNPL payment value.

The news: Klarna expanded its distribution partnership with Stripe, making the buy now, pay later (BNPL) option available to merchants in 26 countries, per CNBC. Stripe merchants will be able to A/B test the impact Klarna has on their conversion rates. As part of the new deal, Stripe will get a share of the fees that Klarna makes from each transaction.

The tech giant discontinued its buy now, pay later (BNPL) service in June and instead partnered with Klarna and Affirm. This was a major turnaround from its grand aspirations to build a suite of in-house financial services dubbed 鈥淏reakout鈥� in 2022. As Apple鈥檚 first independent lending venture, Pay Later was expected to be a key part of this suite鈥攂ut it didn鈥檛 even last a year.

How we got here: Gen Zers are more likely than any other generation to use BNPL, but this debt isn鈥檛 usually reflected in their credit scores or overall balances. Among Gen Z respondents, 50% frequently use BNPL, and we forecast 26.4 million US Gen Zers will use it  by the end of 2024.

These efforts will be especially important for Klarna as the BNPL boom fades, leading to slowing user growth: The number of US BNPL users will rise just 6.9% YoY in 2024, compared to 17% in 2023 and 20.5% in 2022, per our forecasts.

For example, Visa launched its Flexible Credential product this year, a digital card that lets consumers pay with debit; credit; buy now, pay later (BNPL); or rewards. Prediction 5: A major issuer will pilot a subscription-based rewards credit card by the close of 2024. Despite some subscription-based credit cards popping up in 2023, no major issuer piloted such a card this year.

Buy now, pay later (BNPL) use hit a new high. Online shoppers stretched their budgets via BNPL, spending $991.2 million via the alternative payment method鈥攁 5.5% gain YoY. Our take: Consumers are finding ways to spend big during the holiday season. That鈥檚 why we expect US holiday sales to grow 4.3% this year and ecommerce sales to rise 9.0%.

One has been ramping up its offerings: In April, it launched its buy now, pay later (BNPL) solution for big-ticket items at the retailer. It also offers banking services like checking and savings accounts, rewards for users who shop at Walmart, and early wage access for Walmart鈥檚 employees. Across all of its products, One boasts 3 million monthly active users.

The buy now, pay later (BNPL) provider鈥檚 transactions grew 10% YoY over the holiday weekend. The number of Afterpay app users jumped 8% YoY. Afterpay attracted users across all demographics: 26% were Gen Zers, 44% were millennials, 24% were Gen Xers, and 6% were boomers. The top spending categories outside of fashion and beauty were personal care, followed by household supplies.

The number of buy now, pay later (BNPL) service users in the US will grow by 34.4% this year to reach 91.5 million, per our August 2024 forecast. Use this chart: Marketers can use this chart to strategize how to message essential products to consumers should tariffs or a trade war increase prices. Retailers can use this chart to craft initiatives around highlighting essential products if prices rise.

The added BNPL options help keep Google on a level playing field with Apple, which also offers Affirm and Klarna as payment options. With virtual cards, Google has a leg up on the competition. Apple recently enabled virtual cards for Apple Cash, but it still doesn鈥檛 offer this security feature for other cards stored in its wallet.

For example, despite their growth, buy now, pay later (BNPL) services are used by only about 4% of US social commerce buyers, per our March 2024 survey. But they鈥檙e used by 11% of US digital buyers overall, per our April 2024 survey conducted by Bizrate Insights.

The key stat: 54% of US consumers who took on debt to pay for holiday gifts are at least somewhat concerned about repaying it, per data from CivicScience. 27% of buy now, pay later (BNPL) users concerned about paying debt owe between $100 and $500, 10% owe between $500 and $1,000, and 19% owe $1,000 or more.

Google is expanding Google Pay's payment options by adding Afterpay to its existing buy now, pay later partners Affirm and Zip, with Klarna coming soon. Our take: Google is one of several notable companies turning to retail and ecommerce to boost engagement and deepen consumer connections.

It could also be a big opportunity for other device-agnostic payments apps that don鈥檛 offer contactless payments鈥攍ike BNPL firms Klarna and Affirm. That could help them finally break into in-store retail. Our take: On its own, Vipps isn鈥檛 going to take down Apple Pay鈥檚 preeminence.

Apple鈥檚 credit card, BNPL product, and savings account put it in direct competition with financial services incumbents. With 130.1 million US iOS users loyal to its unsurpassed UX and dominant digital platform, the threat will only grow.

The CFPB has been very active the past year, releasing rules on buy now, pay later (BNPL), open banking, and early wage access programs, among other areas. Of course, the future of the CFPB isn鈥檛 entirely based on the presidential election. Director appointees would need approval from Congress, for example. Cordray鈥檚 own confirmation was held up by Republicans in the Senate for nearly two years.

It will also roll out Pix Garantido, which would let customers make installment payments. There is no launch date for this feature yet. Our take: Pix Proximity can help boost in-store Pix payments by streamlining the payment process at the point-of-sale. These innovations can also help serve as a roadmap for the US as it tries to build a domestic instant payments system, FedNow.

Buy now, pay later drove $686.3 million in online spend, up 8.8% YoY, per Adobe. GenAI-powered chatbots drove shoppers to spend. Consumers鈥� use of genAI-powered features grew 6% week over week on Black Friday as shoppers turned to the technology to find products that suited their needs, per Adobe.