Overview
- CFPB data show Pay-in-4 loans rose 23% to 335.8 million in 2023, totaling $45.2 billion, while charge-off rates fell to 1.83% and late-fee revenue declined from 2021 to 2023.
- The bureau reported a 12% rise in users to 53.6 million but cautioned the figure may be overstated because most Pay-in-4 loans are not reported to credit bureaus, a gap that limits visibility into borrower exposure.
- BNPL firms and industry groups welcomed the findings, with Klarna, Zip and trade associations citing the report as evidence of lower-risk, consumer-friendly repayment performance.
- UK retail data from the BRC show alternative payments, including BNPL, reached 4.1% of transactions and 5.0% of turnover in 2024, with average transaction values nearly doubling to £37.55.
- The FCA is progressing toward formal oversight of BNPL, with final rules expected in early 2026 and regulation scheduled to start on July 15, 2026, extending protections such as access to the Financial Ombudsman Service.