Half of Holiday Shoppers Are More Likely to Complete Their Purchase With Buy Now, Pay Later Services

Core Insights - Half of holiday shoppers are more likely to complete their purchase if they can use buy now, pay later (BNPL) services, indicating a significant impact on consumer behavior [1] - PayPal's data shows that offering BNPL leads to a 91% higher average order value for enterprises and 62% higher for small businesses, highlighting its importance as a competitive advantage [1] Consumer Trends - Gen Z and millennial shoppers are the most likely to use BNPL for holiday shopping, with one-in-four members of both generations regularly utilizing the service [3] - The primary reasons for using BNPL include affordability and budget control, reflecting a shift in consumer spending habits [3] Market Growth - Americans are projected to spend $116.7 billion via BNPL services by the end of 2025, indicating robust growth in this sector [4] - The Federal Reserve reported that 82% of BNPL users utilize the service for convenience, showcasing its integration into everyday shopping [4] Financial Implications - A significant portion of BNPL users, particularly those earning less than $50,000, rely on the service as their only means to afford certain purchases, emphasizing its necessity for lower-income consumers [5] - Nearly a quarter of BNPL users are financing their groceries, an increase from 14% the previous year, indicating a broader application of BNPL services [6] Payment Behavior - From May 2024 to May 2025, nearly a quarter of all BNPL users had at least one missed payment, up from 18% the previous year, with lower-income shoppers experiencing higher rates of missed payments [7] - Among BNPL users making less than $25,000, 40% had a late payment, reflecting a 9 percentage point increase year over year, while only 13% of users making $100,000 or more missed a payment [7]