What the CFPB’s New Buy Now, Pay Later Market Report Shows

The CFPB’s new Buy Now, Pay Later (BNPL) market report shows that BNPL is still growing quickly, but growth is slowing, loan sizes and usage per user are rising, and credit performance has improved even as more consumers use these products. It also highlights seasonal spikes around the holidays, modest late fees, and lower charge‑off rates, underscoring both the expansion and emerging risks that regulators are watching closely.​

Market growth

• BNPL originations among the six large providers studied reached 335.8 million loans totaling about 45.2 billion dollars in 2023.​

• From 2022 to 2023, the number of BNPL transactions grew about 23% and total dollar originations about 23–26%, slower than the rapid growth seen in 2019–2021 but still strong.​

User base and usage

• The report estimates 53.6 million BNPL users with these providers in 2023, up roughly 12% from 2022, showing wider adoption.​

• Users took an average of 6.3 loans per lender in 2023 (up from 5.7), and average annual BNPL spend per user rose from about 745 dollars to 848 dollars (around 14% growth), indicating more intensive use.​

Credit performance and fees

• Charge‑off rates declined, with one analysis of the CFPB data noting a drop from 2.63% in 2022 to 1.83% in 2023, and charged‑off dollars falling to under 1% of origination volume.​

• The CFPB data and external trackers point to relatively low late fees (the typical fee around 9.99 dollars), and late‑fee and loss rates have generally trended down over 2021–2023 as underwriting and credit models improved.​

Seasonality and consumer risks

• BNPL usage is highly seasonal: borrowing jumps sharply around Black Friday through Christmas Eve, with daily BNPL spending in 2022 rising from roughly 100 million dollars on average to about 150 million during the holiday window.​

• The report notes that while defaults used to spike more for holiday‑season loans, that pattern has become less pronounced over time, suggesting lenders have tightened standards, but the CFPB still flags risks from stacking BNPL with other unsecured debts and from consumers using multiple lenders.​

Regulatory and policy signals

• By publishing this new “Buy Now, Pay Later Market” spotlight and related studies, the CFPB signals continued monitoring of BNPL, focusing on issues like over‑indebtedness, dispute handling, and transparency of terms.​

• The report’s message is that BNPL has become a significant, mainstream form of short‑term credit for retail purchases, and regulators are likely to keep pressing for stronger consumer protections as the market matures.​