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We forecast Klarna鈥檚 US total payment value will reach $41.58 million in 2028. And depending on its approach, Klarna could meet growing demand for crypto services.

This will help extend Affirm鈥檚 reach and bring in new customers, which can boost volume growth: We predict Affirm鈥檚 US payment value will reach $20.54 billion in 2023, up 22.5% YoY, per our forecast. Digging deeper: For a closer look at key trends we鈥檙e watching in the BNPL industry, read our 鈥淪tate of Payment Methods鈥� report.

That buy now, pay later data, that growth rate is actually right in line with our forecasted growth rate overall. So you said buy now, pay later is grew at 20% year over year. That's exactly where we've got it at in our forecast for US buy now, pay later growth year over year. That's for a total of 72 billion this year.

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The news: Klarna expanded its distribution partnership with Stripe, making the buy now, pay later (BNPL) option available to merchants in 26 countries, per CNBC. Stripe merchants will be able to A/B test the impact Klarna has on their conversion rates. As part of the new deal, Stripe will get a share of the fees that Klarna makes from each transaction.

They鈥檙e also a major BNPL audience: 31.0 million (42.2%) US millennials will use BNPL services this year, per our forecast. See the interactive Payment Flexibility demand chart in the Appendix. No. 6: Redeeming Rewards. Category Value: 11.7% of total points. Earned rewards are useless if customers can鈥檛 spend as they choose.

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Ecommerce sales growth in Australia hit 25% year over year (YoY) in 2021 but slowed to 4% the following year, according to Insider Intelligence forecasts. Australia was already a competitive market to operate in鈥攊t鈥檚 home to BNPL giants like Block-owned Afterpay and Zip, and other providers like Klarna and PayPal have also moved in.

The partnership is part of the BNPL provider鈥檚 operational overhaul and pivot to a fully white-label strategy

Expanding audience reach requires targeting the correct consumers. While true one-to-one advertising is still a dream, similar outcomes can be achieved by reaching the right audiences through affiliate marketing, paid social, and buy now, pay later (BNPL). 鈥淭his whole trend around personalization really applies to audiences as well,鈥� David Gill, vice president of consumer insights at Rakuten Advertising, said during our recent 鈥淢aster the Holidays with Winning Performance Marketing Strategies鈥� Tech-Talk Webinar. Data from affiliate marketing and social platforms can be used to identify which kinds of consumers brands should be reaching out to in order to expand their customer base.

By 2028, more than half (50.2%) of US smartphone users will be proximity mobile payment users, accounting for 132.6 million people, per our March 2024 forecast. 39% of retailers in Australia, North America, and the UK plan to provide more payment options, such as BNPL, to stay competitive in 2024, according to a January 2024 report by Square. The prediction: 鈥滲iometric checkout has a lot of legs.

We forecast the number of Google Pay users in the US will grow 8.2% this year to reach more than 26 million in 2023. Adding features and products鈥攍ike BNPL鈥攃an make Google Pay simpler and more convenient. Meta:. Facebook Pay rebranded as Meta Pay, bringing the payments suite in line with Meta鈥檚 grand plans for the metaverse.

GreenSky may be an attractive acquisition as consumers rely more on BNPL for essential purchases

Apple鈥檚 credit card, BNPL product, and savings account put it in direct competition with financial services incumbents. With 130.1 million US iOS users loyal to its unsurpassed UX and dominant digital platform, the threat will only grow.

On today's podcast episode, in our "Retail Me This, Retail Me That" segment, we discuss how Gen Zers discover products; where they stand on buy now, pay later; and how loyal they really are to brands. Then, for "Pop-Up Rankings," we rank three campaigns that really worked with Gen Z. Join our analyst Sara Lebow as she hosts analyst Arielle Feger and editor Catherine Ollinger.

Issuers must provide payment flexibility to compete against buy now, pay later (BNPL) and shifting consumer expectations. US BNPL payment value will see a compound annual growth rate (CAGR) of 14.8% from 2023 to 2027, when it will reach $124.82 billion, per our forecast. This pales in comparison to the $3.466 trillion in credit card spending at food service and retail in 2023.

During the same period, the number of BNPL users will rocket 37% to 112.7 million. And while crypto payer penetration lags, the number of payers will have almost doubled between 2021 and 2025, reaching 5.0 million. In each of these cases, Gen Zers and millennials are driving growth. Tap-and-pay has become the preferred way to pay in-store.

To view the full forecast, click the above chart. Gen Z Wants to Pay Digitally鈥擡ven in Person. Gen Z鈥檚 love of digital payments is well known, especially for peer-to-peer apps like Venmo and buy now, pay later (BNPL) options.

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Networks are using their open banking technology to power BNPL solutions. For example, Mastercard Installments relies on the technology the company gained access to when it acquired Finicity and Aiia. And the BNPL sector is a huge volume opportunity: US BNPL volume will hit $143.44 billion in 2026, per our forecast. Increased digital ID capabilities.

Buy now, pay later (BNPL) has thrived because it combines the flexibility of credit with short repayment terms, app-based shopping, and a simple user experience.

If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.