Buy now, pay later has become a mainstream form of consumer credit, but a growing share of it is going unpaid in a corner of the market that traditional collectors and credit bureaus rarely touch.
That is a central takeaway for the accounts receivable management industry from “Pay Later Revolution: Redefining the Credit Economy,” a PYMNTS Intelligence report tracking how credit cards, BNPL providers, banks and merchants are reshaping installment lending. Over the past 12 months, 128 million American adults used a Pay Later product, and U.S. BNPL transactions now total roughly $175 billion.
Adoption is climbing fast. Some 38% of consumers used BNPL toward the end of 2024, up from 24% a year earlier, putting the product on par with general-purpose credit cards. More than six in 10 users now carry multiple active BNPL loans at once, a stacking pattern the CFPB has flagged as a consumer-protection concern.
For ARM professionals, the more important signal is who is falling behind and what happens next. About 51.2% of adult BNPL users borrow out of necessity, often because they have limited access to traditional credit and are covering essentials such as groceries. Delinquencies are rising in step: nearly 30% of BNPL loans were past due in mid-to-late January 2025, a roughly 54% jump from 19.4% the prior month, though still below November’s 33.3%.
Yet most of these past-due balances never enter the standard recovery workflow. The report notes that most BNPL providers do not report late or on-time payments to the credit bureaus, and most do not turn over uncollected balances to debt collectors, given the small dollar amounts involved. Instead, they typically cut off future credit. Default is generally recognized as a charge-off at 180 days past due, with delinquency starting at 30 days, though the definition of “late” varies from a single day to a week or more across lenders.
