The buy now, pay later (BNPL) industry’s explosive growth is a thing of the past. The number of US BNPL users will grow only 6.9% in 2024, a major slowdown from prior years. And while payment value will rise at a still-strong rate of 20.8% this year, it too marks a significant deceleration.

The product category is maturing, and only the strongest BNPL providers will survive. In 2024 alone, Apple, NatWest, Zilch, Laybuy, ZestMoney, and Openpay shut down or reduced their BNPL operations.

Despite slowing growth, BNPL remains an important segment. Almost 4 in 10 US digital buyers will use it at checkout this year, and the figure will jump to nearly half among Gen Z and millennial digital buyers.

And many consumers are leaning on BNPL as a credit card alternative. High interest rates, tightened lending standards, and a lower level of savings have pushed them to look for alternative financing options:

• Almost half (49.5%) of BNPL service users cited avoiding interest as one of the top reasons why they used the service, per our August 2024 US Cash-Back Credit Card Emerging Features survey.
• More than one-third (36.2%) of users in the survey said they used BNPL services because they were short on cash at hand.
• And about 1 in 10 (10.1%) users said they used BNPL services because they could not get approved for other credit options.