Consumers exhibit across-the-board confusion about their eligibility for different credit products, per a report from i2c and PYMNTS. BNPL providers are losing their messaging campaigns if consumers think credit cards are more attainable than a pay-in-four plan. As issuers maintain tight underwriting, BNPL providers can also swoop up consumers who need credit but don’t qualify for new lines of traditional credit. If BNPL platforms can advertise their accessibility for the average consumer, they can capture spend from incumbents.

The news: Zip partnered with Nift to bring AI-powered “thank-you” gifts to its checkout flow, per company announcements. The integration brands send Zip users tailored offers after making a purchase, aiming to strengthen loyalty while creating new ad inventory. Our take: Zip’s tie-up with Nift illustrates how fintechs are positioning themselves not only as payment providers but also as media channels. The average BNPL users will spend more than $1,600 a year by 2029, per our forecast. As spend per user climbs, Nift’s native, post-checkout placements with conversion rates up to 10% will be especially appealing to both Zip and brands.

The news: Affirm’s gross merchandise volume (GMV) grew 43% YoY to $10.4 billion, per Q4 FY 2025 earnings (ended June 30). The buy now, pay later (BNPL) company reported strong numbers across the board. Revenues soared 33% YoY to $876 million. Active consumers increased 24% YoY to 23 million. Transactions per active customer grew 19% to 5.8. The number of active merchants jumped 24% to 337,000. Our take: Affirm’s dominance in the US market is propelled by powerful Affirm Card spend—we forecast Affirm will edge out Klarna in terms of US volume by $4.7 billion. If the firm can keep growing its average ticket size, it could carve out a healthy niche in the consumer credit market: purchases that are too small to jump through the hoops of securing a personal loan but too large to pay off in one month on a credit card balance.

The news: More than one-third (38%) of parents are stressed about affording back-to-school items, per Zip’s back-to-school survey. Our take: Given the level of strain for parents, BNPL providers have an opportunity to pitch their alternative credit models to overstretched families. Targeted marketing campaigns around back-to-school season and easy opportunities to use installments in store and online through BNPL-enabled cards and partnerships can strengthen spend.

The news: Klarna is seeking a valuation of up to $14 billion in its coming IPO, per filings with the Securities and Exchange Commission. The BNPL provider will list with the New York Stock Exchange under the ticker symbol KLAR. The stock price at IPO is anticipated to be between $35 and $37 per share. Our take: Klarna is hoping its IPO can capture investors’ hunger for high-growth tech stocks after a period of uncertainty. Fueled by its partnerships and card launches, Klarna is setting itself up to challenge Affirm on US BNPL spend.

The news: Michigan State University Federal Credit Union (MSUFCU) launched an in-house buy now, pay later (BNPL) feature to serve its members’ financial needs, per a press release. Our take: Credit unions can compete with big banks and fintechs alike by leaning into what younger consumers want. Catering to these student members helps credit unions stave off their age dilemma: In 2023, 69% of credit union customers were Gen X or older, per a McKinsey & Company study. Conversely, banks are performing better with younger consumers: 41% of their banking population is millennial and Gen Z and 58% are Gen X or older. As graying members spend down savings and shrink credit unions’ deposits and interest income, players like MSUFCU can strengthen their banking relationships with young members through aligned alternative finance methods like BNPL.

The findings: Financial institutions (FIs) that have enabled buy now, pay later (BNPL) for debit cards see increased card usage frequency, higher spending, and larger purchases, per recent equipfi analysis cited by The Financial Brand. Why this matters for FIs: The BNPL explosion is over, as user growth decelerates and the industry reaches maturation. But FIs can still find value in BNPL. By integrating BNPL directly into existing debit card programs, banks stand to increase card usage, strengthen customer loyalty, and boost revenues. This strategy also turns debit cards, a very traditional banking product, into something that can better meet consumer needs. Today’s banking customers crave flexibility—and it’s especially important to Gen Zers.

The news: Buy now, pay later (BNPL) firms are exhorting the Department of Housing and Urban Development (HUD) not to write new rules about how installment loan histories would affect federal home loan eligibility. Our take: BNPL providers are divided on whether furnishing their loan information supports or hurts their espoused mission for financial inclusion and helping consumers access credit. Affirm appeared the odd one out by offering more transparency about its consumers’ financial health. However, if HUD moves ahead with new loan eligibility rules, its customers could end up the better for it, while reporting naysayers Klarna and Afterpay will have to scramble to set up their customers for success

The news: Middle-income credit cardholders who are satisfied with their card are more likely to use buy now, pay later (BNPL) products than all other BNPL users, per a YouGov survey. 48% of satisfied US credit cardholders who used BNPL in the last month reported being middle-income, versus 39% of all BNPL users. BNPL users who were satisfied with their credit card were also more likely to be higher income than all BNPL users, at 10% to 8%. Our take: Issuers of credit cards should note that even their happiest customers desire the flexibility of interest-free installment plans. Credit card companies can get ahead by marketing their card-linked installment plans to their cardholder bases and capture the BNPL spend that could have been lost to a fintech.

The news: Zip’s total transaction volume (TTV) spiked 30.3% YoY in fiscal 2025 (ended June 30, 2025), driven by momentum in its US business. Cash before taxes, depreciation, and amortization (EBTDA) more than doubled YoY to AUD 170.3 million ($109.38 million), a 147% increase. Total transaction value hit AUD 13.1 billion ($8.42 billion). Transaction volume was up 22.1% YoY to 93 million. Net bad debts decreased YoY to 1.5% of TTV, down from 1.7% in FY24. Our take: Zip’s year-end results reflect the spending strength of US consumers. We forecast US total retail sales to hit $7.513.38 trillion for 2025. By comparison, Zip’s native Australia is only anticipated to crack $356.49 billion in total retail sales this year.

The news: FundCanna launched B2B buy now, pay later (BNPL) platform ReadyPaid to address the cannabis industry’s endemic cash-flow problem. Our take: Alternative financing pairing well with an alternative industry comes as no shock. If cannabis is finally descheduled by the federal government—or at least reclassified, as President Donald Trump has considered—ReadyPaid will have a harder time competing against traditional banks that likely will openly service weed-related business without regulatory threats.

The news: Affirm will be available as a payment option for in-store shoppers on Stripe Terminal for US and Canadian merchants, per a press release. Our take: Snagging a Stripe Terminal integration is a big win for Affirm. This can help expand its lead in the US, where it holds $35.69 billion in payment value—a $4 billion dollar lead over Klarna.

The news: Klarna’s revenues jumped 20% YoY to $823 million in the latest earnings released ahead of its IPO this fall. Gross merchandise volume (GMV) spiked 19% to $31.2 billion—nearly four times the size of competitor Affirm’s $8.6 billion. Klarna’s US GMV growth is even more impressive, at 37% YoY. Our take: Klarna will have an uphill battle if it wants to dethrone Affirm as the dominant BNPL provider in the US. Given Affirm’s recent partnership with Stripe, Klarna may not be able to rely on the fintech for such rapid growth anymore—especially considering Affirm’s more direct integrations with Stripe in-store.

The news: Revolving consumer credit growth has been negative for two months, per Federal Reserve Board data. Annualized revolving credit growth declined 3.5% in May and 1% in June. A year ago, annualized revolving credit growth stood at 6.15% in May and -0.92% in June. Our take: In the face of uncertainty, consumers are wary of spending unless they feel incentivized to change their behavior, especially as tariff-related pressures increase.

The news: Klarna, Affirm, and Zip will be available as autofill payment options through Google Pay on Chrome for cart sizes of $35 or more. Our take: Increasing the ease and availability of a payment method for US consumers can increase volume for BNPL providers and Google.

The news: Block’s gross profit rose to $2.54 billion, an increase of 14% YoY. Cash App’s gross profit grew 16% YoY Square’s gross profit increased 11% YoY Developments like Cash App Afterpay are gradually drawing the distinct Cash App and Square ecosystems into a robust dual-sided network. However, the Cash App’s enduring lack of a credit card makes it harder for Block to sell itself as the one-stop shop for young people’s financial needs.

The news: Marqeta’s total processing volume (TPV) hit $91 billion in Q2, a 29% YoY increase. Our take: Marqeta’s success with buy now, pay later could help it finally wean off its dependence on Block, which still accounts for 46% of its business. With planned expansions into Europe, Marqeta has the opportunity to put more distance between it and its competitors by leaning into solutions for alternate financing and currencies, like BNPL and crypto.

The news: Klarna and Afterpay will not share the majority of their consumers’ loan information with credit bureaus until they can receive confirmation that their customers will not be penalized for seeking buy now, pay later (BNPL) plans. Our take: Affirm’s early plunge into credit reporting has been blunted against its competitors’ refusal to participate in the system, but it still takes the reputational lead in terms of being a “trustworthy” provider.

The news: Klarna might push its IPO date up as late as September, per a report from Bloomberg. Our take: Whenever Klarna schedules its IPO, it can bank on the strength of its partnerships—like DoorDash, Walmart, Stripe, and Walmart—to sustain its growth. Fintechs have faced a tough environment for IPOs ever since the high-water mark of 2021. Firms are now required to demonstrate better pathways to profitability before going public. However, despite tariffs and geopolitical disturbances, fintechs have the ability to outperform expectations: Take Circle’s blockbuster IPO back in June. With investors hungry for AI-focused companies, Klarna may be well positioned to ride the wave of its peers’ earlier success in the market.

Payment processing solutions from major US digital commerce platforms are maturing and capturing a greater share of their retail ecommerce sales. Here’s how five platforms are approaching the payment facilitator (payfac) model to catapult their growth.