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Note: Examples of websites or apps primarily engaged in financial services include those of banks (e.g., Chase, Wells Fargo), fintechs (e.g., buy now, pay later services, insurtechs), and payment providers (e.g., Block, PayPal).

Issuers like JPMorgan and TD Bank introduced new flexible payment offerings in 2022 to compete with buy now, pay later (BNPL) providers and encourage consumer spending. Visa and Mastercard also ramped up their BNPL programs to help them grab a share of the $75.60 billion BNPL market in the US. Consumers embraced flexible payment options as high inflation persisted through 2022.

Expand buy now, pay later (BNPL) to physical stores. Cash-strapped consumers will look for ways to stretch their dollars during the holidays. These shoppers will be ready to use BNPL at brick-and-mortar locations, meaning retailers can capture incremental purchases by providing in-store payment alternatives.

Read on: Check out our US Buy Now, Pay Later Forecast 2022 report to learn about what鈥檚 driving growth in the sector. This article originally appeared in Insider Intelligence's Payments Innovation Briefing鈥攁 daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily. Are you a client? Click here to subscribe.

Parents anticipate opting out of BNPL as a payment method. Nearly 60% of parents participating in JLL鈥檚 back-to-school survey have no plans to use buy now, pay later (BNPL) for school-related purchases. However, this payment option remains attractive for 20.4% of parents looking to purchase expensive required items.

And buy now, pay later (BNPL) providers appear less attractive lately due to their potentially risky lending portfolios and a threat of possible regulation. Our take: Banks that were previously unable to snag a fintech in 2021 due to their rich valuations now have an opportunity to pounce, with some assistance from boosted revenues.

II: BNPL products are becoming more popular. Would SumUp ever consider moving into the space? SD: We do offer installment payments in a few of our markets around the world. But there's a difference between those more structured payment plans and a true BNPL plan like Afterpay offers.

As well as keeping prices low, retailers should look for ways to offer more convenience to consumers鈥攕uch as by expanding click-and-collect capabilities, extending return windows, or allowing flexible payment options such as BNPL鈥攖o encourage shoppers to spend.

Despite the warning, Mastercard is working on projects that can set it on a path for long-term growth鈥攍ike its investments into buy now, pay later (BNPL). Mastercard is building out its own BNPL program with merchants and fintechs. It recently signed a deal with Switzerland-based fintech ZoodPay to expand its prepaid virtual installment card product in Eastern Europe, the Middle East, and Africa.

More than one-third of US Gen Zers have used BNPL recently.

We correctly called Apple exploring BNPL, after it teased Apple Pay Later. And Meta, Google, and Amazon have built out the financial services they offer, although have all taken very different approaches. Our hyper-personalization prediction: We foresaw that new players would build hyper-personalized experiences to help consumers take control of their finances.

Financial institutions (FI) and fintechs have sought to close the gap between what patients can afford versus the cost of medical care with credit cards and鈥攎ore recently鈥攚ith buy now, pay later (BNPL) products. Synchrony鈥檚 CareCredit and Wells Fargo鈥檚 Health Advantage credit cards are two of the most popular medical cards.

This might include banking services that reach underbanked populations, buy now, pay later (BNPL) support for Gen Zers, or value-added security features that win over nervous holdouts. Read the full report.

Holiday shopping helped lift buy now, pay later (BNPL) volume in Q4 but couldn鈥檛 compete with 2021鈥檚 BNPL surge. Some clients tightened their lending standards, which also hurt Marqeta鈥檚 volume. What鈥檚 next? Marqeta anticipates a modest slowdown in consumer and business spending in 2023鈥攖hough not to the extent that a recession would bring.

The opportunity: Financial and payments institutions like buy now, pay later (BNPL) platforms have users who are often close to the point of purchase, making the platforms a ready opportunity for serving ads. The drawbacks: Financial websites ranked lowest among websites where US consumers are most receptive to ads, according to a Q3 2023 study from Integral Ad Science.

So Buy Now, Pay Later accounted for 7.6% of online orders, which is up 16.4% year over year. And that really stuck out at me. Buy Now, Pay Later use has been soaring over the past few years. Last year it was 6.4% of all orders, and consumers are continuing to spend, but they're increasingly turning to credit and credit alternative options such as Buy Now, Pay Later. And it's interesting.

The number of US buy now, pay later (BNPL) users will reach 88.2 million this year, representing over a third of US internet users. We expect that number to grow to 104.6 million by 2026, driven by growing merchant acceptance and increased usage among younger generations. Klarna is pushing further into in-store BNPL services, giving advertisers a chance to reach consumers in-store as well as online.

Apple is furthering its push into finance with its buy now, pay later (BNPL) offering, Apple Pay Later, and its new high-yield savings account, which could tap into customers interested in financial services integration with their digital wallet, said Toplin.

We may see more providers following Klarna鈥檚 path: It recently launched pre-issued refunds on eligible returns paid for with its BNPL product. Travel and events will remain top spending categories:. US spending on movies and live performances grew 31% YoY through September 2023, per Mastercard.

And it鈥檚 reportedly been mulling a move into buy now, pay later (BNPL) with a deal for ZestMoney. PhonePe's plans to expand into insurance, wealth management, and lending will also help it diversify, and tech investments should improve its products.

EPI also intends on adding buy now, pay later (BNPL) financing and digital identity features. How we got here: EPI is a coalition of major European banks, credit institutions, and other payments firms that joined together to build a pan-European payment network to compete with the likes of Visa and Mastercard.

CEO Jason Gardner also highlighted Marqeta鈥檚 strong customer relationships in the buy now, pay later (BNPL); neobank; and expense management verticals. Block by far makes up the largest share of Marqeta鈥檚 business: It accounted for 72.5% of Marqeta鈥檚 net revenues in Q3, up from 69% in Q2, Gardner noted.

Recession could push debt-wary credit card users to payment methods they view as less risky, like debit cards; buy now, pay later (BNPL) loans; and cash. Issuers can emphasize payment flexibility, affordable financing, and no-fee balance transfers to risk-worthy cardholders. Tailor rewards toward consumer staples.

And Amazon partnered with Affirm to bring buy now, pay later (BNPL) to US and Canadian customers. Related content: Check out what our Retail & Ecommerce analysts have to say about Buy with Prime鈥檚 expansion. This article originally appeared in Insider Intelligence's Payments Innovation Briefing鈥攁 daily recap of top stories reshaping the payments industry.

Offering promotions on its card and BNPL offerings can help Amazon achieve this growth, especially since many customers are extra-aware of their holiday budgets this year: 57% of consumers plan to create a holiday-specific budget this year as a result of inflation and rising prices, according to a survey from TD Bank.