U.S. Consumers to Spend $18.5 Billion on BNPL Services for Holiday Shopping

U.S. shoppers are projected to spend a record $18.5 billion on Buy Now, Pay Later (BNPL) services for holiday shopping, a 11.4% increase from the previous year. As BNPL usage rises, consumer debt concerns are also growing, with watchdogs warning of potential financial pitfalls.

U.S. shoppers are projected to hit a record $18.5 billion in spending using Buy Now, Pay Later (BNPL) services for holiday purchases in the year's final quarter, according to Adobe Analytics. This spending signals an 11.4% increase from the previous holiday season.

BNPL services, allowing consumers to break payments into monthly installments, will surpass the anticipated 8.4% rise in total holiday spending, which could total $240.8 billion. Firms like Klarna, Afterpay, and Affirm are poised to gain market share at the expense of debit cards and other payment forms.

However, financial experts warn that using credit cards to pay BNPL installments can deepen consumer debt. Despite these concerns, companies like Affirm and Klarna report low delinquency rates, while regulatory bodies continue to tighten oversight on BNPL practices.

(With inputs from agencies.)