Buy Now, Pay Later:
Early Warning Signs of
a Weaker Consumer?

Shan Ahmed
DEC 06, 2022

Key Points


The “Buy Now, Pay Later” (BNPL) industry grew rapidly with pandemic online shopping—five, large lenders made over 180 million loans in 2021. 


Gen Z shoppers are the heaviest users of BNPL services, and over 55% of digital buyers in that demographic are predicted to use a BNPL loan in 2022. 


BNPL loans have been showing increased defaults and late payments, a possible sign of stress for the lower- and lower-middle income consumers.

We recommend

Four Scenarios: Recession, Soft Landing, Stagflation, or the Status Quo

U.S. Housing Market: Things that Rise Also Fall

The “Buy Now, Pay Later” (BNPL) landscape is a window into consumer spending (and stress) for the lower-two income quintiles—a segment of the population highly affected by the inflationary macroeconomic environment. Younger, lower-income consumers, who are less financially established, are more likely to use BNPL loans. As inflation persists, credit usage has generally increased, and lower-income consumers have depleted much of their savings.