The Consumer Financial Protection Bureau (CFPB) released a data spotlight on the buy now, pay later (BNPL) market. Using data about the BNPL market for the years 2022 and 2023 from six large BNPL providers, the report describes trends and figures in BNPL market growth, borrower usage, late fees and charge‑offs. While there are different versions of the BNPL product, the report focuses on four-installment, no-interest consumer loans with a down payment of 25% and the remaining three installments due in two-week intervals (and does not include data on other forms of short-term financing). The CFPB previously issued BNPL reports in September 2022, March 2023 and January 2025.
The publication comes just days after Senate Banking Committee Democrats called on CFPB Acting Director Russell Vought to publish statutorily required reports about the CFPB’s work, including its semiannual report and reports on fair lending, predatory student loans, and consumer risks in the credit card market.
Key takeaways
The report summarizes continued growth in the BNPL market, in terms of transaction volume, the number of BNPL consumers and loan amounts.[1]
- Growth of BNPL volume continues but has slowed. In 2023, BNPL originations reached 335.8 million loans totaling $45.2 billion. From 2022 to 2023, BNPL transactions made by the companies in the survey grew by 23%, and the total dollar amount of originations grew by 26%. While the market is still robust, the figures demonstrate a slower pace of growth than prior years. The CFPB notes that tighter underwriting standards and diversification of BNPL products may account at least partially for the slower growth.
- User base for BNPL loans has grown and become more active. The six firms reported a combined 53.6 million users in 2023 (up 12% from 2022). The CFPB notes that while this figure is likely overstated – it does not consider that consumers may have taken out BNPL loans from more than one of the six lenders – the data still indicates that the number of BNPL users has grown.
Notably, the average number of loans per user increased from 5.7 to 6.3 (up 11%), and the average annual BNPL spend per user increased from $745 to $848 (up 14%).
- Late fee incidence and revenue declined. Four out of the six BNPL companies surveyed charged late fees throughout the survey period. Among these four, the share of loans with a late fee fell from 5.2% (2022) to 4.1% (2023). Average late fee dollar amounts decreased slightly from $10.72 in 2022 to $9.99 in 2023.
- Decreased charge-offs. The charge‑off rate decreased from 2.63% in 2022 to 1.83% in 2023, and the dollar amount of charged-off debt as a share of total origination volume fell to 0.92%. Lenders surveyed indicated the lower charge-off rates may be due to better credit models and a focus on deepening usage among existing customers.
- Other trends. BNPL usage remained strong and seasonally spiked around the holidays.
What’s next?
The report follows other recent news in the BNPL market. Last week, a coalition of attorneys general requested information from the same six BNPL providers to evaluate their BNPL programs and whether they comply with consumer protection laws. Before that, a group of Senate Democrats sent letters to seven BNPL providers requesting data to better understand their products. Both inquiries followed the CFPB rescission of a Biden-era interpretive rule stating that providers of certain pay-in-four BNPL products are “card issuers” subject to certain disclosure and other consumer protections in the Truth in Lending Act as amended by the CARD Act and Regulation Z.
This latest report demonstrates the continued strength of the BNPL market, including decreased charge-offs. Despite the positive data, certain states and Democratic members of Congress will likely continue their efforts to increase regulation of BNPL products.
[1] All figures are adjusted for inflation.