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The buy now, pay later (BNPL) provider has been looking for new ways to grow its overall card presence. It partnered with FIS in February, letting FIS鈥� bank partners integrate Affirm鈥檚 BNPL solution directly into their existing debit card programs. Our take: This tie-up can help Affirm propel its overall volume growth.

Apple is expected to have 65.6 million mobile proximity users in the US in 2025, compared with Google Pay鈥檚 38.7 million, per our forecasts. The added BNPL options help keep Google on a level playing field with Apple, which also offers Affirm and Klarna as payment options. With virtual cards, Google has a leg up on the competition.

Click here to view our full forecast for US BNPL service user share, by age. What should FIs do next? Consider offering BNPL solutions. Almost half of credit unions say BNPL is not in their near-term plans, per January 2024 data from PYMNTS Intelligence. But as demand grows, it鈥檚 worth evaluating the option.

More than one-quarter (27%) of UK adults鈥攁bout 14 million people鈥攗sed BNPL at least once in the last six months of 2022, per data from the UK鈥檚 Financial Conduct Authority (FCA). This can greatly boost Affirm鈥檚 user base: We forecast the BNPL provider will have 16.7 million US users in 2025. How it will fare: Affirm will face steep competition attracting UK BNPL users.

Most consumers aren鈥檛 using BNPL frequently enough to make it cost effective

Holiday retail sales will grow by approximately 4.5% in 2023, a slight increase from the previous year鈥檚 3.9% growth, according to our June forecast. While this growth may not seem significant, it would represent the sixth-fastest growth rate in holiday sales in the past 15 years, according to our forecast.

For example, buy now, pay later (BNPL) online orders jumped 72% the week of November 18 compared with the previous week. BNPL revenues rose 47% over the same period. The Cyber Five (and Black Friday in particular) remain the heart of the holiday season.

After experiencing a surge in growth in 2021, US retail sales growth began to slow last year, a pattern which will continue into 2023. According to our forecast, sales will rise by less than 3% this year, reaching over $7.3 trillion.

Holiday retail sales will grow 4.5% to reach $1.317 trillion this year, according to our forecast. Retailers who want to carve out a share of that spend will need strong promotional strategies and a seamless digital-physical experience. It鈥檚 also not a bad idea to have a plan ready for when the returns start rolling in.

Expanding into healthcare payments can help invigorate growth for BNPL players as user growth slows

It鈥檚 a large volume opportunity for the BNPL player and helps Klarna compete with. It can also help keep users loyal to Apple as its NFC tech opens up

Digital wallets鈥� 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.

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

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And BNPL is becoming a popular financing alternative: 4 in 10 US digital buyers will use BNPL at least once in 2025, per our forecasts. The Upgrade Financing feature should also prove popular among Apple fans who continually want the latest and greatest Apple products. Apple offers a similar upgrade program for the iPhone.

We forecast Affirm鈥檚 US total payment value for the year will total $30.58 billion.

However, Gen Zers are the second-most likely to consider BNPL essential for the holiday season (41%), right behind millennial parents (42%). Gen Z consumers and millennial consumers will make up 64.9% of total BNPL users in the US this year, with 24.6 million and 31.6 million users, respectively, per our forecast. US BNPL payment value will rise 20.8% to reach $94.29 billion this year.

But usage of the payment option remained quite limited compared with the share of buyers who use BNPL at any point during the year

Tying up with DoorDash gives the BNPL provider a massive volume opportunity

The number of buy now, pay later (BNPL) service users in the US will grow by 34.4% this year to reach 91.5 million, per our August 2024 forecast. Use this chart: Marketers can use this chart to strategize how to message essential products to consumers should tariffs or a trade war increase prices. Retailers can use this chart to craft initiatives around highlighting essential products if prices rise.

The retailer鈥檚 reported plans to launch its own BNPL product through its fintech, ONE, could help boost customer spending.

The BNPL provider expanded its merchant network and pushed in-store. A potential Apple Pay deal could help raise its profile