Sezzle partnered with David’s Bridal, per a press release. Shoppers will be able to select Sezzle’s buy now, pay later (BNPL) financing at checkout in-store, with ecommerce solutions rolling out in the following weeks. Strategic partnerships will be critical to helping an underdog BNPL competitor capture volume. While BNPL firms are embracing partnerships with mobile wallets and POS providers to fast-track their acceptance networks, striking individual partnerships in largely untapped industries like wedding wear can be critical to gaining market share—especially while the biggest players compete in more concentrated industries like travel.

Klarna will launch its own stablecoin, KlarnaUSD, per a press release. The Swedish fintech is building KlarnaUSD on Stripe’s Open Issuance powered by Bridge, making it the first neobank to release a token on the platform. To execute this future, firms need to educate consumers on the nature of stablecoins versus other digital currencies, which historically have experienced dramatic price volatility. By assuring consumers that stablecoins are backed by fiat, payment providers have a greater chance of convincing shoppers to convert to crypto.

Block will pilot a real-time credit scoring model called Cash App Score, per a press release. Users’ Cash App Scores are based on financial behaviors within the Cash App ecosystem: deposit frequency, spending habits, savings activity, and repayment history, and other metrics. Cash App’s micro loans have acted as a proof of concept for its proprietary underwriting model, which it now likely wants to expand into larger-value (and more lucrative) lending. Giving consumers a visible—and highly manipulable—score can boost loan value and overall engagement.

Cash App will offer Afterpay on the Cash App Card powered by a new Visa Debit Flex Card, per a press release. Expanding BNPL offerings helps encourage spending from consumers who can’t access a credit card under tightening underwriting conditions. While the Cash App card is already geared toward underserved and underbanked consumers, rewards or features for young parents could help capture their hunger for credit: Two-thirds of caregivers hold three or more BNPL loans at once, per a Lending Tree survey.

Cash App released a slew of updates across its payments ecosystem, per a press release. Cash App’s continued focus on expanding financial services and tools for unbanked, underbanked, and lower-income consumers also reveals Block’s ambition to own this market, as Venmo hones in on students and educated young professionals. Making Afterpay’s BNPL tool more easily accessible to Cash App users helps this demographic navigate economic uncertainty with a tool they may see as less risky than revolving credit.

Affirm’s gross merchandise volume (GMV) increased 42% YoY to $10.8 billion during its fiscal Q1 2026 (ended September 30, 2025). Healthy performance across its POS integrations and its debit card is key to why we forecast Affirm will remain the dominant US BNPL player against its chief competitor, Klarna, by a margin of $4.7 billion in US volume. While Affirm notched its second quarter of profitability at $81 million in net income, it’s going to need to widen its margins to compete with the rewards PayPal can offer consumers, such as 5% cash back on Pay Monthly loans.

U.S. Bank launched the Split World Mastercard, a credit card that puts every transaction on an installment plan, per a press release.U.S. Bank wants to capitalize on consumer demand for both card-linked installments and BNPL cards. It’s a play specifically for Gen Zers, who tend to gravitate toward installments. These younger consumers can also use the card as a credit-building tool, a sought-after feature. But the Split Card may be a tough sell to prospects.

AI is reshaping how payment providers attract, serve, and retain customers. Those who act now to integrate AI across the life cycle—from discovery to checkout to support—will gain an edge, while those who wait risk losing loyalty and control.

Ascend Federal Credit Union launched a debit card-linked installment offering through a partnership with equipifi, per a press release. It’s difficult for credit unions like Ascend to compete with the top issuers on credit card programs. They lack the necessary funds and resources to launch expansive credit card rewards offerings. But they have a better chance of competing for customers’ business when it comes to debit cards. Offering perks like card-linked installments can set their programs apart and draw in customers who are looking for more flexible financing options without applying for a new credit card.

Fintechs, big tech, and payment players are using genAI to redefine finance. To compete, banks must pair strategic genAI investment with hyper-personalization and human support to earn customer trust and loyalty.

PayPal’s revenues grew 7% YoY to $8.4 billion in Q3 2025, driven by the success of branded experiences, PSP, and Venmo, per its earnings report. While PayPal notched a successful quarter, storm clouds are on the horizon. Basket sizes are shrinking and average order value is sinking, per PayPal CFO Jamie Miller. Leaning into payment flexibility and desirable rewards like cash back can help payment providers earn loyalty from squeezed middle- class consumers.

Splitit partnered with DXC Technology, enabling affiliated banks to offer installment options at checkout for their consumers, per a press release. Expanding BNPL availability during the upcoming holiday season will be critical. In order to capture consumers’ limited spending, issuers should broaden financing options to make gift-buying more manageable and interest-free, especially for consumers with children, who are more likely to use BNPL options than any other demographic besides millennials at 46.7%, per a PYMNTS study.

The effects of the Capital One-Discovery merger are still coming into relief, two quarters after the deal exploded the size and scope of Capital One’s business. If issuers continue to reorient their investments strictly to their premium offerings, subprime cardholders will become increasingly stranded for lines of credit from incumbents. This gives an opening for fintechs and buy now, pay later platforms to snag this population, as traditional lenders back away from credit-thin consumers in pursuit of wealthy spenders.

Affirm called for a cap on late fees in the buy now, pay later (BNPL) industry, per the Financial Times. BNPL platforms have an opportunity to gain customer loyalty through advertising—and practicing—transperant lending practices. Alternative lenders that operate with clear terms can get more consumers to select BNPL financing over revolving credit, especially when young consumers choose the payment method out of perceived safety over credit cards.

TransUnion has introduced new pricing for credit scoring for mortgage borrowers, undercutting the pricing of FICO’s new mortgage credit scoring model: FICO charges resellers $10 per score, while TransUnion charges $4. The market for consumer credit data and how it’s packaged is hotly contested, and the government has helped facilitate competition. In addition, the fintech Plaid, a newcomer to credit reporting, just introduced a cash flow–based scoring model. This competition is good for consumers, because it creates more ways for them to access credit. And it should also be good for data buyers, including banks, because it will mitigate prices and encourage the development of more sophisticated scoring models and data products.

Klarna rolled out Klarna balance and Klarna Card in the UK. Credit cards aren’t as big a market in the UK as they are in the US, but issuers should be concerned by what Klarna calls its “balances.” Klarna is a real bank in the EU and recently was granted an Electronic Money Institution license in the UK. That means even without getting a bank charter in the UK—or the US for that matter—it can use its existing bank infrastructure to offer a robust suite of bank-like services in the style of Cash App or even Apple Wallet.

Synchrony reported $1.1 billion in net earnings during Q3 2025—a notable increase from Q4 2024’s $789 million, while net revenues were flat at $2.8 billion YoY, per a press release. Buy now, pay later platforms like Klarna, Affirm, and PayPal have an opportunity to pick off consumers from co-brand and private label issuers as the holiday season approaches. While these cards often boast high interest rates, PayPal’s in-store eligible Pay Monthly offers 5% cashback, and Affirm’s 0% interest days likely connect with Gen Zers trying to avoid revolving credit. As long as these fintechs can offer more competitive interest rates, installment plans, or rewards, co-brand cards are caught on the back foot for securing this consumer segments’ loyalty.

Klarna partnered with Qatar Airways, bringing installment plans to checkout for the gulf state airline in 17 European markets. The winning formula for BNPL platforms may be strategic partnerships with airlines without a branded credit card live in certain markets. Qatar holds a branded credit card offering in the US, where it likely encourages US consumers to spend on its card. European consumers, on the other hand, can’t access that credit product, giving Klarna an opportunity to fill that gap for fliers. With this vacuum, BNPL providers can reap the benefit of not having to directly compete against credit cards’ rewards packages.

Klarna and Splitit are pursuing AI initiatives to keep their products top-of-mind for consumers, per press releases. Klarna partnered with Google Cloud to power AI-backed hyperpersonalized marketing campaigns. Splitit debuted its Agentic Commerce Partner Program, bringing card-linked buy now, pay later (BNPL) plans to agent-powered shopping. Replacing human created art with AI generated images is a risky play for marketing, but Splitit’s BNPL angle with agentic commerce may help it establish a foothold in the installment plan arena, especially when tied to shoppers’ preferred cards that they trust and earn rewards.

Affirm announced 0% Days, a three-day promotion running from October 22-24 for eligible Affirm consumers, guaranteeing 0% interest and no late fees for shopping completed through the Affirm app or Affirm Card. Affirm’s inability to compete with rewards from either PayPal or card-linked installment plans may stymie its promotion’s success. If it can expand its merchant partnerships to offer better cash back at more in-demand retailers, Affirm may be able to win over consumers who may have otherwise chosen another provider for their seasonal shopping.