- 3. Juli 2024
Agusto Alarco
Agusto Alarco
Senior Director, Client Insights

Higher cost of debt and growing ubiquity of Buy Now, Pay Later (BNPL) drive consumers to embrace BNPL as a valuable option to overcome budget constraints

Top third-party ‘Buy Now Pay Later’ solutions like Affirm, Afterpay and Klarna, experienced tremendous growth in their US user base during the pandemic and have seen this trend continue as inflationary pressures loom and high interest rates remain in place in the US, post pandemic. Consumers are increasingly employing these solutions to overcome budget constraints while keeping their cost of debt in check, but, surprisingly, they are becoming more willing to pay interest for this service like they do for other traditional financial products. This changing attitude bodes well for the potential of this market, as the main players seek to expand beyond their flagship Splitpay (AKA Pay-in-4) products into a more comprehensive everyday financial solution.

Online Visitation:

The number of unique visitors for Desktop, Mobile Web and Mobile App are 2.8x, 2.7x and 6.7x higher, respectively, during Q4 2023 than at the beginning of the pandemic. And the user base continues to grow, especially on Mobile App, which grew +39% YoY (from Q4 2022 to Q4 2023) and is now the preferred method of engaging with these solutions, accounting for 50% of total BNPL online visitors¹.

This immense growth was empowered by a growing number of partnerships with large merchants and with established payment processors like Stripe, Shopify, Square and Adyen which already worked with vast numbers of smaller merchants. These partnerships have allowed BNPL’s reach to scale significantly, both online and off-line, while efforts to enhance the shopping experience, especially in their mobile app environments, worked in tandem to fuel the growing user base.

Third Party BNPL

Interest in BNPL:

It is very interesting to see how consumers’ interest in BNPL has reacted to the changing economic environment coming out of the pandemic. As the US population gradually resumed their pre-pandemic lifestyles, consumers continued to spend even as inflation rates climbed. The availability of cheap credit enabled people to disregard the higher prices for a while. It took the Federal Reserve pushing interest rates to uncommonly high levels to persuade consumers to finally limit spending and look for financial alternatives. It wasn’t until Q1 2023 that we saw interest in BNPL jump from 28% to 43% of online buyers.

Interest BNPL

Splitpay vs Installments

The way in which consumers are using these solutions is evolving with the market: In 2023, we observed 4.2x more Splitpay transactions than Installments. Splitpay, the flagship BNPL product which offers consumers the ability to pay for purchases over four bi-weekly interest-free installments, is by far the most popular choice among users 4. Installment plans offer consumers the ability to pay for purchases in interest-bearing monthly installments (which can also offer 0% APR promotional loans). ​

Splitway vs Installments

Nonetheless, the Average Order Value (AOV) for Installments is significantly higher than that of Splitpay, which is reflected in longer repayment periods being offered for higher-priced transactions. However, throughout 2023, we observed the AOV for these solutions get a little bit closer in 2023. AOV for Installment plans was 7.8x that of Splitpay in 2022 but declined to 4.6x in 2023. We expect this trend to continue as Splitpay becomes more ubiquitous and consumers tighten their spend on higher ticket items in reaction to stubborn inflation and high interest rates.

Order Value

Engagement and Loyalty:

Users are highly engaged with their BNPL providers. On average, we observe users engaging with BNPL providers’ desktop and mobile sites every two weeks and once a week on mobile app.

Engagement and Loyalty

Of the most popular solutions, Affirm and Afterpay stand out with regard to consumer engagement on desktop and mobile sites, while Afterpay stands out for mobile app engagement.

Cross-visitation across mobile apps is a common practice but varies across providers. Affirm shows the lowest incidence, followed by Afterpay and Klarna. It is important to note that these three are cutting their existing rewards programs to try new loyalty models. Another thing to call out is how Afterpay is consistently the most considered alternative solution for existing users of other BNPL apps.

Despite some players showing a stronger focus on enhancing the shopping experience, it seems that merchant selection and reward programs have had a strong weight in driving higher engagement and loyalty.

Satisfaction and Use After Trying:

Overall, BNPL users are very satisfied with their BNPL providers: 80% of users say they are satisfied and 52% say they are extremely satisfied with their BNPL solution of choice. This speaks well to the practicality of the product, the attractiveness of its product terms, the enhanced customer interphase, and the overall value it offers consumers.

Of those who try the solution for the first time, only 15% of them do not use it again. 44% have used it four or more times since, which extends the consumer exposure to the experience and increases the likelihood of consumers adopting a new habit. Although the percentage of people trying it again may be inching lower in the past two years, from 87% to 85%, the overall numbers look promising and show that this market still has room to grow.

BNPL Satisfaction

Appealing aspects of BNPL:

When asked about the appealing aspects of BNPL, the ‘ability to avoid interest payments’ came up on top but, surprisingly, this percentage has dropped in the last two years, from 65% to 59%.

Appealing aspects of BNPL

The ‘ability to buy something now that users don't have the entire purchase amount already saved for’, ranks second, but its appeal has increased during the same period, from 44% to 52%.

These changes have important implications for this market’s potential as people are increasingly seeing the value of these solutions to overcome temporary budget constraints and they are slowly becoming less sensitive to paying interest, like they do for other traditional financial products.


Overall, the third-party ‘Buy Now, Pay Later’ US market showed tremendous growth during the pandemic and now has a large consumer base with solid engagement and satisfaction. Inflationary pressure and high interest rates can be an ideal environment for more people to try these solutions and build a preference for them, setting them up for growth beyond their Splitpay flagship product. But this market is not without its challenges. Its main headwind is a worsening economic outlook and the higher default risk it brings. But for the time being, it shows the potential to carve out a loyal group of users, which are increasingly seeing the value these solutions offer and are becoming more willing to pay for them.

To continue the conversation about BNPL, get in touch with the team via this link.


1Based on total unduplicated BNPL users across Desktop, Mobile Web and Mobile App by the end of 2023.

2How interested are you in the idea of paying for larger purchases via an installment plan that charges no interest, also known as “Buy Now, Pay Later”?

3Purchase types: ‘Splitpay’ is defined as purchases made using a BNPL solution and paid over four bi-weekly interest-free installments (i.e.. the core ‘Pay-in-4’ BNPL product offering) and ‘Installments’ is defined as a purchases made using a BNPL solution and paid in interest-bearing monthly installments (this also includes 0% APR promotional loans).

4As observed on desktop ecommerce activity measured by Comscore.

5Survey Question: You indicated that you used the following ‘Buy Now, Pay Later’ installment plan provides. How satisfied were you with the provider(s)? (7-point scale); Satisfied = top 3 boxes; Extremely Satisfied = top box.

6Since you first used a ‘Buy Now, Pay Later’ plan, have you used it again?

7 Survey Question: Which of the following aspects of ‘Buy Now, Pay Later’ instalment plans appeal to you?