BNPL usage rises as does late payments

BNPL usage has surged in 2025 and is closely accompanied by a significant rise in late payments among users.​

Key Findings on Usage and Late Payments

• The proportion of BNPL users who have made at least one late payment has risen notably, with recent reports indicating 41–42% of users paid late in the past year, up from 34% the previous year.​

• Data from the Federal Reserve show nearly one-quarter of BNPL users (24%) reported a late payment, a jump from 18% in 2023, while the Motley Fool’s 2025 BNPL Trends Report found an even higher rate at 29%.​

• Younger generations are most affected: 39% of Gen Z and 35% of Millennials have missed payments, compared with 17% of Gen X and 11% of Baby Boomers.​

Causes and Trends

• Many users cite losing track of payments as a root cause, with 19% stating they’ve lost track of their BNPL bills; this figure is highest among Millennials at 25%.​

• The increase in late payments coincides with BNPL expansion into more retail categories and tighter economic conditions, making tracking multiple installment plans more difficult for users.​

Industry Perspective

• Despite the higher late payment rates, default rates on BNPL loans remain lower than those for credit cards (usually around 2% vs 10% for credit cards), suggesting many late BNPL payments are short-term—most are just a week overdue.​

• The continued growth of BNPL, with user numbers and transaction values rising steeply, suggests this trend is unlikely to slow soon.​

BNPL is now a widespread payment option for consumers, but it is increasingly linked to repayment challenges and financial strain, especially among younger users and those juggling multiple loans.​