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Shoppers are more comfortable than ever using BNPL鈥攁nd 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鈥檚 27.6% more than BNPL holiday sales volume in 2022.

But the payment method鈥檚 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.

Earlier this month, Affirm entered the market with its interest-free and interest-bearing buy now, pay later (BNPL) options. American Express also launched its 鈥淧lan It鈥� card-linked installment offering in the UK this year. And other more established BNPL players in the country have also been expanding their operations.

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

The BNPL provider has been prepping for this for years. Its profitability push and cost-cutting initiatives should set it up for a strong listing

Apple Pay has also integrated Affirm, Klarna, and other BNPL players into its wallet. Our take: Marqeta Flex can help speed up this trend, making it easier for wallets and cards to integrate BNPL options. Eliminating the need for BNPL providers to work with merchants will expand where BNPL can be used and accelerate adoption.

Firms must plan for regulatory changes across areas like BNPL, open banking, crypto, and credit cards

Between buy now, pay later (BNPL) players like Affirm and mobile wallets like Cash App and PayPal, the number of fintech cards on the market is growing. Affirm Card gross merchandise volume (GMV) jumped 113% YoY in the quarter ending December 31, 2024. And the number of active Cash App cardholders increased by 1 million in 2024.

Buy now, pay later (BNPL) provider Affirm is among the first payment providers to use the new technology. Its Affirm Card uses Visa credentialing to function at the POS either as a debit card鈥攅nabling cardholders to 鈥減ay now鈥� for the purchase鈥攐r to pay in installments over time.

Last week alone, Visa, Mastercard, Affirm, and PayPal all launched agentic AI solutions.

Examples include Affirm, Afterpay, Klarna, Zip, and PayPal's BNPL service. Some short-term, no-interest loans can be accessed only at retailers. Examples include Bread Pay and SetPay. Services that provide a revolving line of credit, retailer-branded financing options, closed-loop marketplace financing services, and card-linked installment services are excluded.Less.

In the past year, Apple Pay partnered with Affirm and Klarna. Google Wallet also recently added Afterpay and Klarna, building on its tie-ups with Affirm and Zip. Delinquencies will remain low. Structural repayment differences will keep BNPL default rates lower than those of credit cards. Most BNPL providers require automatic repayments, helping keep rates low.

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

The BNPL industry鈥檚 explosive growth is a thing of the past. The number of US BNPL users will grow only 6.9% in 2024, a major slowdown from prior years. And while payment value will rise at a still-strong rate of 20.8% this year, it too marks a significant deceleration.

On today's podcast episode, we discuss how a department of justice suggested breakup of Google could change search, the potential impact of Walmart鈥檚 personalized homepages and customer support, what鈥檚 next for the buy now, pay later (BNPL) space, how Tesla鈥檚 new 鈥渃ybercab鈥� could change the world of robotaxis, what charitable donations in America look like, and more. Tune in to the discussion with host Marcus Johnson, director or Briefings Jeremy Goldman, analyst Evelyn Mitchell-Wolf and vice president of Briefings Stephanie Taglianetti.

How we got here: Apple Pay started partnering with BNPL players like Affirm shortly before shutting down its in-house Apple Pay Later offering. At the time, Apple said it planned to offer card-linked installments from Synchrony, Citi, and Fiserv. Apple Pay has since added Klarna as a BNPL option as well.