Fintechs Dominate BNPL, But Bank-Branded Products Rank Higher, JD Power Finds

As of January, some 37% of U.S. consumers had used buy now, pay later financing when making a purchase within the prior 90 days, a 5% increase from a year earlier, according to JD Power’s annual BNPL study. Half of these consumers were under the age of 40.

JD Power defines the past 90 days as the days prior to each respondent completing the survey, which was conducted from January 2025 to January 2026. JD Power surveyed 3,909 customers during that period.

One driver behind the increased usage of BNPL loans is the marketing muscle fintechs are putting behind the payment option, Sean Gelles, senior director, payments intelligence, says by email. Among consumers taking out a BNPL loan in the past 90 days, 97% did so through a fintech, the report says.

“Fintechs are promoting their BNPL products much more aggressively [than financial institutions],” Gelles says. “This aligns with their strategy of using the daily engagement of payments to challenge incumbent financial institutions for the primary banking relationship with customers.”

Still, financial institutions have an “enormous opportunity” to be bigger players in the BNPL space as consumers look for BNPL options from brands they trust, Gelles adds. The average overall customer-satisfaction score for financial institution-based BNPL brands is 704 on a 1,000-point scale, up 59 points from last year’s study, JD Power says. By contrast, the average overall score for fintech-based BNPL brands is 603, down 17 points from a year ago.

“Across the study, bank‑branded BNPL products outperform on multiple dimensions of the customer experience, including repayment terms, digital experience, security, purchase experience, rewards or perks, and customer support,” Gelles says. “While banks represent a smaller share of overall BNPL usage, they have been delivering a more consistently positive end‑to‑end experience.”

Of the top five BNPL providers ranked by customer-satisfaction score, three are financial institutions. JP Morgan Chase & Co. ranks first with a score of 706. American Express Co. is a close second at 703, followed by Citibank at 687. Fintechs round out the top 10. Sezzle Inc. is the highest ranked, coming in fourth overall at 624, and followed by Zip Co. at 611. 

Pay-in-four is the most popular repayment option with consumers. Among users of fintech-based BNPL brands, 82% opt for the pay-in-four option. Among consumers that use BNPL services through financial institutions, 73% choose it.

“Pay‑in‑four plans are typically interest‑free, whereas longer installment plans often accrue interest,” Gelles says. “It’s reasonable to infer that consumers are drawn to pay‑in‑four options because they offer cost certainty and simplicity without additional finance charges.”

Debit cards are the most widely used form of payment to pay off BNPL loans. Among users of fintech-branded BNPL products, 64% pay off their loans using a debit card. The bank-branded pay-in-four BNPL products covered in the study do not allow consumers to choose the form of repayment, according to Gelles.

Other repayment options chosen by users of fintech-based BNPL brands include ACH (19%), credit (15%), and other (2%), Gelles adds.

Among customers using a BNPL product associated with their credit card, 52% make the decision to use a fixed payment plan after the purchase, while 48% make the decision at the time of purchase.

Overall, JD Power concludes the increasing popularity of BNPL loans is being driven by the ability they give consumers to defer payments, the perception that repayment terms are reasonable, and the belief that BNPL helps consumers budget, avoid overspending, and avoid accruing debt.

“Notably, repayment terms and budgeting do not rank among the top reasons consumers give for using credit cards,” Gelles says. “This suggests BNPL is addressing a persistent consumer need that existing payment methods are not fully meeting.”