PAYMENT METHOD PROFILES: BNPL 2
Compared to other countries, the United States has seen tremendous growth over the last four years, growing from $22 billion in ecommerce transaction value in 2020 to $126 billion in 2024 Here are a few speculations into why the share has tailed off globally over the last few years:
It could be that the BNPL user base has reached its maximum, meaning those interested in using this payment method are using it while those not interested are content using other payment methods.
It could be the increased regulation on this payment method has led the BNPL service providers to increase their credit checks before accepting new users.
Most BNPL providers will not allow consumers to use their service if payments from previous loans have not been received. This could result in a decrease in BNPL usage if users are unable to pay off prior loans.
BNPL v Credit Card GMV & Credit Loss Ratio
3.00%
$1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000
2.50%
2.00%
1.50%
$- $200,000 $400,000 $600,000 $800,000
1.00%
0.50%
0.00%
Klarna
Affirm
Amex
Capital One
Discover
GMV
Credit Loss to GMV
Graph 2.36
BNPL and card providers both provide lines of credit for users, but current usage and assumed risk are varied. In 2024 Affirm received $26 billion in Gross Merchandise Value (GMV) and took on $460 million in credit losses. By contrast, American Express received $1.8 trillion in GMV and took on only 0.29% in credit losses at $5.2 billion.
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