Buy Now, Pay Later
Wells Fargo’s recent report delves into the burgeoning buy now, pay later (BNPL) market, shedding light on its rapid growth despite still being dwarfed by the credit card market. Despite the inherent opacity of the BNPL sector, the Consumer Financial Protection Bureau (CFPB) took proactive steps by issuing orders in December 2021 to the five largest BNPL providers, compelling them to submit customer data for comprehensive risk analysis. The findings revealed a remarkable surge, with 180 million BNPL loans initiated in 2021, amounting to an astonishing $24.2 billion. This marked a substantial leap from the 16.8 million loans totaling $2.0 billion recorded in 2019. The dynamic expansion of BNPL is further underscored by a recent report from Adobe Analytics, indicating that BNPL contributed to a staggering $940 million in online spending on Cyber Monday in 2023, exhibiting an impressive 42.5% year-over-year increase.
The Wells Fargo report underscores the remarkable trajectory of the buy now, pay later (BNPL) market, emphasizing its substantial growth in comparison to the credit card market. The inherent complexity and lack of transparency in the BNPL sector prompted the Consumer Financial Protection Bureau (CFPB) to take action in December 2021, directing the five largest BNPL providers to furnish customer data for rigorous risk assessment. The ensuing analysis unveiled a staggering increase, with 180 million BNPL loans initiated in 2021, totaling an impressive $24.2 billion—a significant surge from the 16.8 million loans amounting to $2.0 billion in 2019. Furthermore, Adobe Analytics’ recent report highlights the impact of BNPL on Cyber Monday in 2023, revealing a substantial year-over-year growth of 42.5%, with BNPL contributing $940 million to online spending. This underscores the increasing prominence and influence of BNPL in shaping consumer spending patterns.
