Is BNPL Unstoppable?

We’ve been getting signals lately that the intersection of short-term point-of-sale lending and payments is likely to be a permanent feature of the landscape.

While the continuing popularity of the buy now, pay later phenomenon won the attention of banks some time ago, now credit unions are starting to get in on the act. That news emerged late this summer just as statistics from the big BNPL platform Affirm Holdings Inc. showed that the increasingly popular shopping service had lifted the company’s gross merchandise volume 43% year-over-year to $10.4 billion in the June quarter, pushing the company’s stock up 15% on the day it reported its results.

Indeed, when we checked two days before the official start of fall, Affirm was up 50% for the year, at more than $91 per share.

Michigan State University Federal Credit Union cited BNPL as a “key factor” in consumers’ purchase decisions as it announced its in-house version of the service, which lets members pay off online and in-store debit card purchases in a few installments. The credit union has $8 billion in assets and almost 400,000 members across the country.

“We invested in BNPL to give our members more control over their budget, with a payment method they prefer,” noted chief technology officer Ben Maxim, in a statement. The school’s service works through an application programming interface with BNPL processor equipifi Inc.

Overall, some 86.5 million Americans used BNPL in 2024, a number expected to grow to 91.5 million this year, according to Capital One Shopping. That’s up from 49.2 million in 2021. The average transaction size is $135, the Cap One report says, though the average borrowed across a full year is $2,085.

Increasing consumer attraction to the payment method is helping to drive results for Affirm, which emerged 13 years ago to serve this market, which was then in its infancy. That move is paying off handsomely for the San Francisco-based company. It reported revenue less transaction costs for its June quarter of $425 million, up 37% year-over-year. The number of merchant firms using the service grew 24%, to 377, while the transaction count grew 52%, to 37.5 million, driven by a 23% rise in active consumers, to 23 million.

Eager to expand outlets for its service, Affirm widened its link with the payments company Stripe Inc. to launch what the companies called the first BNPL integration in a Stripe terminal. Nearly at the same time, the company said it is expanding a partnership with Google Pay to offer its payment options through autofill while users are checking out on a Chrome browser.

Maybe we should call it PNBPL—Profits Now, Bigger Profits Later.

—John Stewart, Editor john@digitaltransactions.net