In April 2025, the Buy Now, Pay Later (BNPL) approach seemed poised to take over consumer finance. This method was already a notable segment of the market, attracting numerous entries, especially from providers aimed at younger, digitally-savvy individuals. Many believed BNPL’s growth was inevitable.
However, the expected surge didn’t materialize. Traditional credit card companies began viewing BNPL as a genuine competitor. They utilized the installment features inherent in credit cards—something BNPL struggles to replicate—and relied on established customer relationships built over years. Research from PYMNTS Intelligence reveals that last year, nearly twice as many consumers opted for credit card installment plans compared to BNPL, and this discrepancy hasn’t changed much. It indicates BNPL has not only maintained its presence but also hit a ceiling.
Despite being designed to appeal to younger consumers, BNPL’s adoption has been less enthusiastic than anticipated. For instance, 47% of Gen Z have utilized credit card installment plans compared to just 23% who turned to BNPL in a recent survey. Interestingly, those earning less than $50,000 per year engage with BNPL far less than higher-income individuals, even though BNPL initially aimed to broaden access. This pattern suggests that established financial ties and comfort with credit cards are influencing payment choices more than the need for credit in a tightening economy.
These observations are part of the insights shared in “One year later: What postpaid data actually reveals,” an exclusive report from PYMNTS Intelligence. The Postpaid Ecosystem Report is based on eight surveys conducted from April 2025 to March 2026, each surveying about 2,500 U.S. consumers. The report delves into consumer use of two significant pay-later tools—BNPL and credit card installment plans—and their shifting preferences as of early 2026.
Main findings
BNPL faced competition but couldn’t match credit card benefits.
In every one of the eight surveys last year, card installment plans outperformed BNPL nearly two-to-one.
Younger demographics favor credit card installments.
Gen Z, Millennials, and Bridge Millennials engaged with credit card installment plans at about 1.8 to 2.5 times the rate of BNPL across all surveys.
BNPL focuses on younger, credit-constrained users, yet high-income earners utilize it most.
Approximately twice as many consumers with annual incomes of $150,000 or more used BNPL compared to those making less than $50,000.
BNPL is intended for planned purchases. Essential expense reliance leads to late payments.
Users relying solely on BNPL for necessities see a much higher late payment rate than those using it for occasional purchases.
Close the deferred payment gap
BNPL attracted competition but fell short against credit card offerings.
BNPL providers had ambitious goals, aiming to lead in installment loans, particularly among the youth. While it secured a niche, it hasn’t stormed the market as predicted. From April 2025 to March 2026, more than twice as many consumers chose credit card installment plans over BNPL, and this ratio remained stable through the year.
This situation primarily hinges on the incumbents. Credit card companies didn’t need to devise new offerings to contend with BNPL; rather, they effectively promoted existing installment features within their products. For current cardholders, this process is convenient since they don’t need to apply for new credit. In stark contrast, BNPL providers often require such steps, making it harder for them to compete.
Young consumers play hard-to-find games
Younger consumers favor credit card installment plans over BNPL.
The anticipated growth narrative around BNPL revolved around youth who were supposed to prefer it over traditional credit cards. Yet the reality has been different.
Current data shows that 47% of Gen Z have used credit card installment plans recently compared to 23% using BNPL. Similar findings emerged for Millennials and Bridge Millennials. Investigating trends, it’s clear that card installment plans were utilized at roughly double the rate of BNPL across age demographics.
Seeing these patterns indicate that BNPL is having difficulty fulfilling its core objectives.
High-income surprise
BNPL aimed at credit-challenged consumers but sees use among higher earners.
Initially, BNPL targeted people often sidelined by traditional credit—like young, low-income consumers. Its streamlined design avoided the need for a credit card, using an app for easy checkout authorization.
Yet, the latest analysis indicates BNPL hasn’t fully captured low-income markets. Research shows that a mere 10% of individuals earning under $50,000 opted for BNPL in the past 90 days. While previous trends were similar, fluctuations can be expected. Notably, usage didn’t substantially rise even in the $50,000 to $100,000 income range.
Conversely, among high earners, BNPL adoption rates reach 18% for households earning between $100,000 and $150,000, and spike to 20% for those above $150,000. Prevailing data continues to reveal disparities between high and low-income users, indicating BNPL serves more as a spending optimization tool than a means of access.
Discrepancies in recurring expenses
BNPL is meant for one-time purchases, yet many use it for essentials, leading to bill payment delays.
BNPL’s purpose is to facilitate individual purchases with clear repayment terms. Unfortunately, many turn to it for routine costs, like groceries and bills, which can alter payment timing unexpectedly.
Recent research shows that 76% of those using BNPL for essential purchases reported at least one late payment recently. In contrast, when BNPL is reserved for single or discretionary buys, late payments are down to 43%. This gap remains consistent throughout all survey waves, showcasing persistent structural differences. While BNPL works well for planned spending, it can complicate financial management with ongoing expenses.
Conclusion
A year’s worth of data reveals that although BNPL holds an edge over credit card installment plans, it isn’t increasing its market presence. This holds true for younger consumers and those from lower-income backgrounds, where BNPL was anticipated to thrive. Ultimately, the established position of card issuers, bolstered by existing customer ties, gives credit card installment products a significant advantage that BNPL providers seem unlikely to overcome in the near future.
Methodology
“One year later: What postpaid data actually reveals” is the latest installment in the Postpaid Ecosystem series by PYMNTS Intelligence. This report is based on a survey of roughly 2,500 U.S. adults beginning in April 2025 and conducted monthly through March 2026.
The analysis explores BNPL and credit card installment plan usage across generations, income brackets, and purchase types, ensuring the sample reflects the U.S. adult population by age, gender, education, and income.
Note: The initial April 2025 survey did not distinguish between general card installments and store-specific options, potentially underestimating the adoption of credit card installment plans in that wave compared to later surveys.
