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Through a tie-up with FIS, issuers can integrate Affirm's BNPL solution into their debit card programs

The BNPL provider has made strong inroads in the US but faces steep obstacles in growing its market share

They’re still using the payment method, but some are wary the plans lead to overspending

The BNPL player’s revenues doubled in Q4 thanks to users’ more frequent purchases

Despite an industrywide push to grow via nonmerchant partnerships, BNPL players still rely on individual deals to reach large merchants

Their model proved they can include BNPL loans without hurting most consumers’ credit scores

Partnering with a major BNPL player like Klarna could help Mastercard catch up to Visa’s head start

The directive from acting Director Scott Bessent throws recent payments rules like the open banking and BNPL rules into flux

BNPL providers approved 79% of applications in 2022 thanks to counteroffers for subprime borrowers

Following behind, Afterpay will make up 11.4% of the payment value. These players are all also scoring major non-merchant partnerships, making them available at most places consumers shop. For example, Affirm and Klarna partnered with Apple to get their installments in Apple Pay. (They are also available in Google Pay.).

While BNPL losses remain low, consumers may be overextending themselves, making it harder for consumers to pay off their growing credit card balances

The firms also made deals with Google Pay—as did Afterpay and Zip. Klarna and Affirm also teamed up with Marqeta to embed their installment offerings in payment apps that work with the issuer processor. Worldpay made Klarna a default payment option for all Worldpay merchants. Zip integrated with Stripe, adding a BNPL option to merchants’ checkouts.

The tie-up will bring the BNPL provider to a bevy of merchants’ checkout pages—whether they like it or not

Digital wallets’ 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.

Shoppers are more comfortable than ever using BNPL—and not just during the holidays. Buy now, pay later (BNPL) volume will hit $18.5 billion this holiday season, with Cyber Monday alone accounting for just shy of $1 billion in spend, per Adobe. That’s 27.6% more than BNPL holiday sales volume in 2022.

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

But the payment method’s volume grew slower than overall retail sales, suggesting providers need to do more to amp up growth

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

On today's podcast episode, we discuss how folks viewed big ticket items over the Thanksgiving holiday shopping period, how in-store foot traffic shook out, and the impact of buy now, pay later (BNPL). Listen to the conversation with our Senior Analyst Sara Lebow as she hosts Senior Analyst Zak Stambor and Analyst Rachel Wolff.

The point-of-sale installment offering will face adoption hurdles given growing competition in the country

This could further propel BNPL volume this holiday season as well as catapult merchants’ holiday volume.