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But usage of the payment option remained quite limited compared with the share of buyers who use BNPL at any point during the year

This tie-up defies previous concerns about the viability of funding the BNPL industry

A new set of digital winners is emerging amid the market turmoil of 2022. Using our forecasts, we showcase how ecommerce, social media, fintech, and more are being transformed.

Digital wallets鈥� transformation into commerce enablers speeds up. We make a case for digital-only consumer credit cards. And we see a new threat that BNPL poses to credit cards.

If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.

Holiday retail sales will grow by approximately 4.5% in 2023, a slight increase from the previous year鈥檚 3.9% growth, according to our June forecast. While this growth may not seem significant, it would represent the sixth-fastest growth rate in holiday sales in the past 15 years, according to our forecast.

For example, buy now, pay later (BNPL) online orders jumped 72% the week of November 18 compared with the previous week. BNPL revenues rose 47% over the same period. The Cyber Five (and Black Friday in particular) remain the heart of the holiday season.

After experiencing a surge in growth in 2021, US retail sales growth began to slow last year, a pattern which will continue into 2023. According to our forecast, sales will rise by less than 3% this year, reaching over $7.3 trillion.

The BNPL provider expanded its merchant network and pushed in-store. A potential Apple Pay deal could help raise its profile

Holiday retail sales will grow 4.5% to reach $1.317 trillion this year, according to our forecast. Retailers who want to carve out a share of that spend will need strong promotional strategies and a seamless digital-physical experience. It鈥檚 also not a bad idea to have a plan ready for when the returns start rolling in.

Instead of traditional loans, they鈥檙e taking what they think is the faster, easier route: BNPL. Consumers under the age of 35 comprise 48% of BNPL users, per our forecast. By contrast, they comprise just 35% of traditional credit card holders, per a 2023 report from LexisNexis Risk Solutions.

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.

While this is a win for Klarna, merchants may not want to take on the higher transaction costs that sometimes come with BNPL plans

BNPL is making strides but struggling to grab a meaningful share of US retail sales. BNPL is still a small retail payments player. While 73% of US consumers said they鈥檇 heard of BNPL in 2022, just 5.8% said they鈥檇 used it at least once over a 30-day period. US BNPL value will hit $80.77 billion in 2024, per our forecast鈥攋ust 1.1% of total US retail sales. That share will tick up to only 1.5% by 2027.

The retailer鈥檚 reported plans to launch its own BNPL product through its fintech, ONE, could help boost customer spending.

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.

37% of US Gen Zers and 32% of millennials have used a buy now, pay later (BNPL) service to make at least one purchase recently, according to Morning Consult.

Strong volume growth and 100 million users prove the BNPL provider鈥檚 successful expansion

The tie-up can bring in a large new stream of payments volume for the BNPL player, boosting growth ahead of going public next year

With $21.99 billion in BNPL payment value, according to our July 2023 forecast, Klarna would be the largest BNPL provider to integrate with Apple Pay. June 18, 2024. Banking big: Which is the largest commercial US bank by consolidated assets? A) JPMorgan Chase. B) Bank of America. C) Goldman Sachs. D) Wells Fargo.

By 2026, 38.9% of US internet users will use a BNPL solution, up from 30.7% in 2022. And the average user will spend $1,371 via BNPL, up more than 43% from 2022.