Why 'buy now, pay later' may threaten Big Banks

Market Trends & Adoption - Buy Now Pay Later (BNPL) usage continues to grow across consumer segments and is becoming ubiquitous in online and in-store shopping [1] - The industry observes widespread adoption of alternatives to credit cards, presenting a significant opportunity to disrupt the US credit card industry [3] - In 2024, an estimated 865 million Americans used BNPL, and this number is projected to rise to 915 million in 2025 [4] Impact on Financial Institutions - BNPL plans are changing consumer spending habits by offering short-term installment options as an alternative to credit cards [2] - Big banks and financial institutions have reasons to be cautious of consumers using BNPL plans, especially with the growing number of users [3] - BNPL represents a significant gap in understanding consumer credit quality [4] Challenges & Opportunities - Credit cards have struggled to adapt to consumers' needs [2] - The industry is in a transition period with skepticism and uncertainty surrounding new products like BNPL, as traditional institutions protect their own products [4]