The news: Buy now, pay later (BNPL) volume hit new highs over the first half of the holiday season, including $747.5 million in online spending on Black Friday alone, an 8.9% YoY increase.
Klarna reported Black Friday sales boosted its November volume 45% YoY, and PayPal said pre-Black Friday sales promotions lifted its BNPL volume by 23% YoY.
How we got here: BNPL providers have aggressively expanded their partnerships and integrations to reach more consumers at the point-of-sale (POS). Over the past year, Klarna notched tie-ups with Walmart, Poshmark, Bolt, Stripe, and DoorDash, getting its buy button in front of more customers online and in-store. PayPal took a similar strategy, scoring tie-ups with Mastercard One Credential, Fiserv, and Perplexity.
Even more crucially, the rollout (and rapid takeoff) of BNPL-enabled cards like the Klarna Card have acted as engines for BNPL growth, giving consumers flexibility to shop with BNPL in-store without having to scan a QR code.
Why this matters: Consumers are turning to BNPL to finance their holiday shopping as access to traditional credit lines tightens and cost-of-living pressures intensify. Parents with young children and consumers living paycheck to paycheck are more likely to use BNPL than other demographic groups, at 46.7% and 42.7%, per a PYMNTS study.
However, BNPL use is also climbing among middle- and upper-income households, which face less financial strain and broader credit access. This reflects a dual dynamic:
- Many consumers are stretching to make ends meet, and BNPL can help smooth cash flow in a high-cost environment.
- At the same time, shoppers who can pay upfront are opting for BNPL to preserve liquidity, chase merchant-specific deals, and maintain spending momentum.
That growing demand is pushing fintechs to compete with card-linked installment plans that pair BNPL loans with credit card perks.
Our take: The growth of BNPL volume signals alternate credit’s rising place in US consumer spending. The trend reflects both consumers’ financial strain and their continued willingness to spend, even if it means restructuring how they pay.