Buy now, pay later (BNPL) remains popular for everyday purchases, but tighter regulations and economic pressures are reshaping it into a smarter money-management tool.
Buy now, pay later (BNPL) became popular by letting customers split purchases into smaller, interest- free payments. Fast, easy and modern, it attracted young shoppers and boosted retail sales. Now, tighter budgets, rising interest rates, and new regulations are slowing BNPL’s growth.
Stricter rules, including affordability checks and clearer fee disclosures, make BNPL safer but reduce rapid expansion. Economic pressures mean consumers are more cautious about instalments. The market has also become crowded, and weaker BNPL providers are struggling to survive.
Despite this slowdown, BNPL’s core advantages — no-interest instalments, fast approvals and easy budgeting — remain attractive for consumers managing tight monthly expenses.
BNPL evolves into money-management tool
BNPL is moving from a shopping convenience to a broader financial tool. Customers increasingly use it for travel, healthcare, utility bills and other daily expenses. New provider models focus on budgeting, credit-building and safer spending.
Governments in the UK, USA, and Australia have created stricter rules, like strong credit checks and clearer fee disclosures, making BNPL safer but limiting its growth.
Economic pressures also affect adoption, as higher living costs make consumers more cautious with instalment payments. The market has become crowded, and the only strongest BNPL providers are thriving.
BNPL Is evolving, not disappearing
Customer trust is now split between neobanks and traditional banks
Figure 1. Comparison of customer trust in neobanks and traditional banks
| Growth | Slower growth in the US, UK | Stronger use in emerging markets |
| Regulation | Stricter rules reduce quick approvals | Rules increase trust and safety |
| User behaviour | More careful spending | More daily-use payments (food, bills) |
| Market shape | Small BNPL firms are struggling | Big banks + card networks entering BNPL |
| Purpose | Mostly impulse shopping | New focus: budgeting, credit-building |
Source: BankQuality
BNPL evolves into a money-management partner
BNPL is shifting from a shopping convenience to a broader financial tool. Customers increasingly use BNPL for travel, healthcare, utility bills and other daily expenses. New provider models focus on budgeting, credit-building and safer spending.
Banks and card networks are entering the space, offering BNPL options within mobile apps. These traditional providers add reliability, regulatory oversight and improved trust, helping consumers feel safe while maintaining flexibility. Many credit cards now allow payments in instalments, further increasing confidence.
A lot of customers want simple terms without hidden fees or confusing language. They prefer apps that help prevent missed payments and dashboards that display all instalments in one place, which helps build trust. Customers generally accept credit checks if they keep them safe from overspending.
Gen Z users continue to favour easy apps, instant approvals and small instalments, while millennials increasingly use BNPL for travel and essential purchases.
AI, banks and smarter features shape BNPL
Artificial intelligence (AI) will help customers understand how instalments affect monthly budgets and may flag risky payments. Smarter features, subscription-based BNPL, and broader bank participation will make BNPL safer and more reliable.
BNPL is not disappearing; it is just changing. The fast, messy growth stages are over. BNPL is entering a safer, more responsible chapter, combining convenience with consumer protection. Learn more about the buy now, pay later option only on BankQuality.