Buy now, pay later transactions to reach $75.6 billion by the end of 2022

According to Insider Intelligence, buy now, pay later (BNPL) transactions in the US will grow by 77.3% to reach $75.6 billion by the end of 2022. The report states that although more controlled growth is expected in the coming years, sales will still exceed $100 billion by the end of 2024.

Insider Intelligence forecasts that average spending per user in the United States in 2022 will increase by 13.5% year-over-year to $957.46 and will surpass $1,000 in 2023. 

“As major retailers like Target and Amazon embrace BNPL, acceptance is becoming more universal—both online and in-store,” Jaime Toplin, senior analyst at Insider Intelligence, said. “At the same time, major providers like Klarna and Affirm are doubling down on apps that make it easier for customers to use BNPL. And providers continue to move into sectors like travel, letting customers use BNPL for more purchases. These factors are combining to build customer habits and, ultimately, drive spending.”

The number of US BNPL users is expected to increase 56.1% this year to 79 million. Insider Intelligence cites two milestones to watch in 2022: More than a quarter of the US population and over one-third of US digital buyers will use a BNPL service. Among three key players offering BNPL apps, Klarna is expected to remain the market leader by users through 2026, followed by Afterpay (acquired by Square last year) and Affirm. 

“Apple Pay Later’s September launch could surge use by making BNPL readily available to millions of users on a platform native to the devices they use every day. This access and ease of use creates strong competition for existing titans, though Apple’s lower $1,000 limit may restrict the types of purchases the service is used for. It’s likely we’ll see existing giants continue to ramp up loyalty initiatives in anticipation of the new service’s debut,” Toplin stated.

Gen Z makes up the heaviest users, with more than half (55.1%) of digital buyers in that group using a BNPL platform this year—followed by millennials, Gen X, and baby boomers.