BNPL (Buy Now, Pay Later) - statistics & facts
Digital payment options like PayPal’s Pay in 4, Klarna, Afterpay, and Affirm grew increasingly popular in online shops across the world. The Compound Annual Growth Rate (CAGR) of this alternative payment method is estimated to be nearly nine percent between 2023 and 2028. Nevertheless, what are the main global developments one should keep an eye out for in 2025?
2025 will likely be another year of growth for buy now, pay later as companies like Klarna and Affirm seek to expand their operations across the world. This growth will coincide with increased customer protection regulations, asking questions of providers and merchants in how they can offer safe and responsible BNPL solutions.
Regional differences in BNPL use
The adoption of BNPL varies significantly between countries. This is reflected the BNPL market share in over 40 domestic e-commerce markets worldwide, which was highest in Northwestern Europe. Whether the absolute number of users of BNPL was also the highest in Europe is not clear, as densely populated markets like Indonesia, Malaysia, and Vietnam boasted millions of BNPL users. One of the main situations where buy now, pay later is used is for e-commerce. A survey that asked Gen Z's payment preferences in specific situations stated that BNPL was used less often for travel or hospitality than in online shopping. Fast-growing e-commerce markets might see an uptake of BNPL in 2025.BNPL debt and upcoming regulations
The rise of BNPL sparked concerns of consumer debt and potential overspending. This fear largely stems from younger age groups having more debt than their older counterparts, as is shown in the UK. Delinquency among U.S. BNPL users was also higher among younger respondents. This might be caused by the lower availability of wealth among both Gen Z and Millennials. Interestingly, though, the average BNPL debt in Australia showed signs of decline since its peak in 2022. Potential regulations in 2025 might help keep excessive spending in check.Klarna to go public in 2025
Klarna has been rumored to list an IPO since 2022 and is expected to so in March 2025. In November 2024, the Swedish company announced it submitted a draft registration statement for an IPO to the United States SEC. This follows significant restructuring: After several quarters without profitability, Klarna recorded its first profit in a while in 2023. Klarna's valuation was at about 14.6 billion U.S. dollars in October 2024, a valuation significantly lower than the 45.6 billion observed in 2021. After that year, Klarna was affected by interest rate hikes and had to lay off numerous employees. The BNPL provider's gross merchandising volume (GMV) did increase meanwhile. The Swedish company hopes to raise at least one billion U.S. dollars, with plans to price the IPO in "early" April 2025.2025 will likely be another year of growth for buy now, pay later as companies like Klarna and Affirm seek to expand their operations across the world. This growth will coincide with increased customer protection regulations, asking questions of providers and merchants in how they can offer safe and responsible BNPL solutions.
