Wed Sep 10 11:00:00 UTC 2025: **Klarna’s US Debut Highlights Booming ‘Buy Now, Pay Later’ Trend**
NEW YORK – The highly anticipated New York Stock Exchange listing of Klarna, the Stockholm-based buy now, pay later (BNPL) giant, has put a spotlight on the surging popularity of installment payment plans among U.S. shoppers.
Driven by the shift to online shopping during the COVID-19 pandemic, BNPL has exploded in recent years. According to Adobe Analytics, online spending through BNPL reached $82.4 billion in 2024, a 9.9% increase from the previous year. This year alone, consumers have spent over $56 billion using BNPL options between January and August, accounting for 8.1% increase compared to the same period in 2024.
Klarna, along with competitors like Affirm, empowers consumers by providing on-the-spot loans for purchases, repaid in installments. While terms can extend up to 36 months, four-installment plans are the most common.
While data is limited due to a lack of credit reporting, the Financial Technology Association reports a delinquency rate of less than 2% among its BNPL lender members, compared to over 7% for credit cards. Klarna claims a 99% global repayment rate, while Afterpay reported 96% on-time payment rate for the second quarter of 2025. Affirm reported a 2.3% delinquency rate for monthly loans exceeding 30 days past due.
BNPL usage is particularly prevalent among Millennials and Gen Z, who are more likely to consider it for everyday purchases. A majority of Baby Boomers and seniors, however, remain resistant.
A significant portion of BNPL users have subprime or near-prime credit scores, yet about half of all applicants have near-prime or prime scores. Despite its convenience, consumer advocates have raised concerns about the lack of comprehensive data on BNPL debt and the potential for regulatory blind spots. The CFPB is now requiring BNPL providers to address consumer disputes, handle refunds for returned items, and provide regular billing statements.
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