You are currently viewing The Evolution of Consumer Financing in the US – a Comprehensive Review on BNPL and POS Loans

The Evolution of Consumer Financing in the US – a Comprehensive Review on BNPL and POS Loans

As the world moves towards a more digital economy, consumer financing for online shopping has become increasingly important. Leading this trend is Buy Now Pay Later (BNPL) services, which have enjoyed significant popularity among a demographic of young, urban, cash-strapped millennials.

Point of Sales (POS) loans have also made a comeback and have played a significant role in the success of a number of startups offering BNPL solutions. This has led to competitive offerings that allow merchants to increase their Average Order Value (AOV) while offering maximum conversion rates. With the increasing availability of measurable data and analytics tools, BNPL providers like WeGetFinancing have been able to tailor their products to meet/exceed the needs of their target market, which in turn, has driven the rapid growth of the BNPL market in the US.

How the BNPL Industry Works

The BNPL industry, also known as “Buy Now Pay Later,” is a financing solution that enables consumers to make purchases at the point of sale without having to pay upfront. It allows consumers to split a purchase into several interest-free installments, usually over a period of weeks or months. BNPL services have gained massive popularity in recent years due to their ease of use and accessibility, especially for online shopping. The primary goal of these services is to increase the average order value and encourage consumers to get what they want when they want it without having to worry about the upfront costs.

As BNPL services become more important for merchants, a key consideration is how to offer these services effectively and efficiently. WeGetFinancing offers a comprehensive solution that brings together multiple lenders and covers the full credit spectrum. This allows merchants to offer BNPL services to customers of all credit levels, increasing conversion rates and driving revenue growth. With WeGetFinancing, merchants can take advantage of the growing popularity of BNPL services seamlessly and effectively. Overall, as consumers’ expectations for convenient and flexible payment options continue to grow, BNPL services are likely to remain a critical part of the modern retail landscape.

BUY NOW PAY LATER statistics

As more forward-thinking merchants offer this payment option and consumers become increasingly comfortable using it, BNPL will likely become a ubiquitous feature of online shopping.

The Evolvement of Buy Now Pay Later Services

According to recent statistics, the BNPL market is set to grow significantly in the coming years. This growth is largely attributed to the surge of online shopping and subsequently, the adoption of BNPL services by merchants. The percentage of consumers utilizing BNPL services is poised to increase in the years ahead. Some experts predict that as many as 25% of all online purchases could be made using BNPL services by the close of 2023.

Consumer Financing for Online Shopping: The Averages

As per the data, it has been observed that, on average, BNPL borrowers finance an amount of $1,000 per year. This amount is typically used to purchase commodities such as clothing, electronics, and household goods. With BNPL services, consumers can make these purchases without immediately paying the full amount. Instead, they can spread their payments over time, making it a more flexible and feasible option for many shoppers.

Income and Demographics

Interestingly, it has been found that people with higher incomes have a lower likelihood of using BNPL services. Specifically, only 9% of people with an annual income above $200K have used BNPLs at least once. Additionally, BNPL platforms are more popular among renters, with 22% of BNPL users being renters and 15% being homeowners. Women are also more likely to use BNPL platforms (20%) than men (14%).

US BUY NOW PAY LATER services Market Analysis

This growth is fueled by BNPL being a go-to consumer financing option, particularly among the younger generation. In fact, around 61% of consumers aged 18-24 are now using BNPL services, indicating a positive trend for the market.

BNPL creates a new layer to credit schemes, allowing consumers to spread the cost of their purchases over a short period. The top BNPL service providers in the US market include Synchrony, Affirm, and Afterpay, which help to provide private credit to several merchant stores. The 2020 pandemic has created an opportunity for BNPL services to flourish, as it allowed consumers to continue buying essential products, even after losing their purchasing power. Furthermore, consumers without access to credit cards or with poor credit histories could still purchase products online through BNPL services. With the high acceptance of the BNPL method, competition in the market is continuously increasing, with other financing options such as credit cards facing a decline.

US BUY NOW PAY LATER services Market Trends

The US Buy Now Pay Later Services market has witnessed a surge in demand since the pandemic decreased household income levels. This shift has led consumers to opt for BNPL services instead of traditional credit cards as it offers easier access to financing for online shopping. The BNPL industry has become more inclusive, catering to people with low incomes and younger generations. Furthermore, BNPL services have also increased the average order value (AOV) for retailers by providing customers with a more flexible and affordable way to make purchases.

Major players in the US BNPL industry, like Afterpay, Affirm, Wegetfinancing or PayPal, charge around 5-7% of their transaction fees from retailers and merchants. Yes, this is typically higher than the processing fee of traditional credit cards. However, BNPL services provide consumers with the convenience of installment payments without interest or additional charges, making it more attractive than credit cards. While the BNPL and credit card markets compete for a share of the consumer payment market, the accessibility and benefits of BNPL services position it as a more favorable option in the long run.


As online shopping continues to rise in popularity, so does the demand for buy now, pay later services.

PayPal Credit

One of the most popular BNPL services available, PayPal Credit allows you to split purchases into interest-free payments over four installments. With autopay, purchase protection, and no sign-up or late payment fees, this service is a great option for those looking for a simple and straightforward financing solution. However, it’s worth noting that this service isn’t available in every state. Additionally, it may not be the best option for higher-priced purchases, as the $1,500 limit can be restrictive.


Another popular BNPL service, Afterpay allows customers to split their purchase into four installments, which are paid back over the course of six weeks. Keep in mind that Afterpay assesses a late payment fee of up to 25% of the total purchase price but offers many perks like store discounts and rewards through its app.


For those with good credit, Affirm offers a flexible BNPL option with no annual or late payment fees. Their 4-installment loan doesn’t have any maximum credit limit, so customers can qualify for a financing amount that meets their needs. Affirm’s services can be used both online and in-person at thousands of retailers nationwide.


Like the other BNPL apps on this list, Klarna offers four interest-free payments with purchasing power determined by credit. This service is available for use both online and in-person at any retailer of your choice, and the company’s app also features a price comparison tool to help customers save money and earn rewards.


Unlike the other BNPL services on this list, WeGetFinancing is not a singular platform with its own payment option. Instead, it serves as a comprehensive solution that works with multiple lenders to provide consumer financing for online shopping. This means merchants can offer customers a wider range of financing options, allowing them to choose the option that aligns best with their goals and credit score. Additionally, with WeGetFinancing, merchants can access complete credit spectrum coverage, meaning they can provide financing to a broader range of consumers. All of this leads to maximum conversion, improved AOV that exceeds traditional BNPL capabilities, and a next-level competitive advantage.

The Bottom Line

In conclusion, BNPL is revolutionizing how people shop by providing a more convenient and affordable way to finance their purchases. As more people discover the benefits of BNPL and POS, their popularity is set for steady growth, and more merchants will begin to implement these services in their sales strategies. With the right BNPL service, merchants can increase sales and AOV, resulting in faster business growth, more revenue, and of course, increased customer satisfaction.

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