Buy now, pay later has moved from a novelty at checkout to a payment choice shoppers expect on product pages. For an online store, that choice changes who converts, how balances get tracked, and which return and billing questions land on support.
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Key highlights
- $70 billion was the estimated total transaction value of buy now, pay later loans in 2025, measured in real terms. Richmondfed
- 51% of Gen Z and 54% of millennials say they use buy now, pay later more often than credit cards. FOOL
- 19% of buy now, pay later users say they have lost track of upcoming payments. FOOL
- 47% of buy now, pay later users plan their payments ahead of time. FOOL
- 32% of buy now, pay later users have run into problems when using these services. FOOL
- 1.83% of buy now, pay later loans defaulted in 2023, down from 2.63% in 2022. FOOL
How large the market is
The figures below place buy now, pay later against the wider credit card spend that still dominates ecommerce payment statistics.
| Metric | Figure | Source |
|---|---|---|
| Total buy now, pay later loan transaction value in 2025 (real terms) | estimated $70 billion | Richmondfed |
| Real growth in that transaction value since 2021 | roughly 20 percent per year | Richmondfed |
| Share of total credit card spending | about 1.1 percent | Richmondfed |
The channel is still small next to cards, yet the yearly rise is fast enough that checkout teams cannot treat installments as a side experiment. Stores that skip the option give that growth to competitors who show it earlier in the funnel, including on campaigns that already fight cart abandonment.
Who uses it instead of cards
These shares show that younger adults are the group most likely to pick buy now, pay later over a credit card, which matches the age split in Gen Z shopping statistics.
| Group | Share who use buy now, pay later more often than credit cards | Source |
|---|---|---|
| Gen Z | 51% | FOOL |
| Millennials | 54% | FOOL |
| Gen X | 41% | FOOL |
| Boomers | 37% | FOOL |
A store whose catalog skews toward Gen Z and millennials is not offering a fringe method. It is matching the payment these shoppers already say they use more than cards. A store whose buyers are older still sees a sizable share, so hiding the option only on “youth” collections would miss Gen X and boomer demand that is already in the data.
How much people owe and how often they use it
The amounts and rhythms below show that many users keep monthly balances modest, while usage splits between frequent and infrequent shoppers.
56% of adults say their total monthly buy now, pay later payments are $100 or less. FOOL An online store should not assume installment checkout is only for large baskets. Plenty of users are spreading everyday tickets, so the option needs to work on mid-range products, not only on high-ticket items.
27% of adults owe under $50 a month in buy now, pay later payments. FOOL Small recurring balances mean a shopper may have several open plans at once across stores. Product pages should state the installment amount in plain language so a low monthly figure is not mistaken for a low total price.
Each year, between 30% and 40% of respondents who have used buy now, pay later do so once a month or more frequently. FOOL Monthly users treat the method like a habit, not a one-off rescue at checkout. Stores that sell replenishment goods can expect these shoppers to look for the same option on the next order.
Each year, between 30% and 40% of respondents who have used buy now, pay later use it once every six months or less frequently than that. FOOL Infrequent users still need a clear offer when they finally buy. If the option is buried, that rare visit is more likely to stall, which is the same pressure already measured in cart abandonment work.
Whether shoppers keep track and whether they regret it
The survey results below show that planning is uneven, missed dates are common, and a sizable share later wish they had not used the method.
47% of Americans who use buy now, pay later budget for those payments. FOOL Most users either track loosely or lose track altogether. A store that only highlights “pay later” without a calendar of due dates is selling the easy part of the offer and leaving the hard part to the customer.
19% of buy now, pay later users say they have lost track of upcoming payments. FOOL Forgotten due dates turn into late notices, declined follow-on orders, and tickets that look like billing errors. Order confirmation and account pages should repeat remaining dates in the same place as shipment status.
26% of buy now, pay later users say they have regretted using it after realizing the costs. FOOL Regret after the full cost is clear is a trust problem, not only a finance problem. Showing the total alongside each installment, before purchase, reduces the chance that a converted order becomes a complaint.
Problems, returns, and defaults
The figures below show where buy now, pay later breaks for users, and how often loans fail, which matters for ecommerce return statistics and for ecommerce customer support.
| Metric | Figure | Source |
|---|---|---|
| Users who have experienced issues with buy now, pay later services | 32% | FOOL |
| Users who cited returning items as the most common issue | 21% | FOOL |
| Buy now, pay later loans that defaulted in 2023 | 1.83% | FOOL |
| Buy now, pay later loans that defaulted in 2022 | 2.63% | FOOL |
Nearly one in three users hitting a problem is a support load, even when the default rate is low. Returning an item is the issue people name most, so refund timing and whether remaining installments stop must be explained in the return policy, not only in a lender email. Default rates moved down from 2022 to 2023, which is useful context for risk, but a store still needs a process for past-due plans that does not trap the shopper in a loop between merchant and lender.
What this means for Shopify brands
Treat installment checkout as a payment path that needs the same care as cards: clear totals before purchase, due dates after purchase, and a return path that states what happens to remaining payments. Younger buyers are more likely to prefer this path over cards, so burying it below the fold on mobile product pages costs the orders those shoppers are already prepared to place. Older buyers still use it, so do not limit the option to a single collection or a single ticket size.
Staff support for the two failure points the data flags: forgotten due dates and returns. Give agents a script that covers remaining balances, refund timing, and how to reopen or cancel a plan. If cost regret is showing up in reviews, the fix is on the product page, where the full price and the installment price should sit together, not in a post-purchase apology.
Frequently asked questions
How big is buy now, pay later compared with credit cards?
The total transaction value of buy now, pay later loans, measured in real terms, reached an estimated $70 billion in 2025. Richmondfed That sum is about 1.1 percent of total credit card spending. Richmondfed The method is still a small slice of card spend, but it has grown roughly 20 percent per year since 2021. Richmondfed
Do younger shoppers really use it more than credit cards?
Yes, in the Motley Fool Money figures. 51% of Gen Z and 54% of millennials say they use buy now, pay later more often than credit cards. FOOL The same survey puts Gen X at 41% and boomers at 37%. FOOL
Do users plan for the payments?
47% of users plan their payments ahead of time. FOOL 19% say they have lost track of upcoming payments. FOOL 26% say they have regretted using buy now, pay later after the full cost hit home. FOOL
How often do these loans default?
In 2023, 1.83% of buy now, pay later loans defaulted, according to the CFPB figures reported by Motley Fool Money. FOOL That rate was down from 2.63% in 2022. FOOL Default is uncommon next to the share of users who report tracking problems or service issues.
What goes wrong for users, and how large are typical monthly payments?
32% of users have experienced issues, and the most common issue was returning items, cited by 21% of respondents who use buy now, pay later. FOOL 56% of adults say their total monthly payments are $100 or less, including 27% who owe under $50. FOOL Usage is split: each year, between 30% and 40% of respondents who have used it do so once a month or more, and between 30% and 40% use it once every six months or less. FOOL
