Sept 10 (Reuters) - The long-awaited New York listing of

Stockholm-based buy now, pay later (BNPL) giant Klarna ( KLAR ) on

Wednesday has once again shone a spotlight on the installment

plans which have ballooned in popularity among U.S. shoppers in

recent years.

BNPL exploded as the COVID-19 pandemic forced more shoppers

online, driving $82.4 billion in online spending in 2024, up

9.9% from 2023, according to Adobe Analytics.

Klarna ( KLAR ) and other BNPL providers like Affirm boost

shoppers' purchasing power by lending them the money upon

checkout, which they repay in installments spread over as many

as 36 months, although the most common products are

four-installment payment plans.

Because most BNPL providers do not report their loans to the

credit reporting agencies, comprehensive data on BNPL

delinquencies is scant.

The Financial Technology Association, which counts five BNPL

lenders among its members, reports less than a 2% delinquency

rate among those companies compared to more than 7% for credit

cards, according to the Federal Reserve Bank of New York.

Klarna ( KLAR ) says it has a 99% global repayment rate for its

products. Afterpay, which is owned by Block, reported

that 96% of its customers paid all of their installments on time

during the second quarter of 2025.

For the three months ended June 30, 2025, Affirm said 2.3%

of its monthly loans were delinquent by more than 30 days.

Here are five charts illustrating how BNPL is used:

SHARE OF ONLINE SPENDING

Consumers spent more than $696.2 billion online from January

through August this year, with $56.3 billion of that coming from

BNPL purchases, according to Adobe Analytics. That's up 8.1%

from the same period in 2024.

ON-TIME PAYMENTS

Most BNPL users make their full payment on time, according

to the Federal Reserve Bank of Philadelphia. Still, between the

last three months of 2023 and the last three months of 2024, the

number of "pay-in-four" users who made all scheduled payments on

time decreased one percentage point.

AVERAGE MONTHLY PAYMENT

Fifty-seven percent of BNPL users in 2025 reported having an

average monthly payment of $100 or less, according to The Motley

Fool, a research firm. In contrast, Experian reported that the

average monthly credit card payment was $181 in the first

quarter of 2025.

Only 1% of BNPL users had an average monthly payment of more

than $1,000, according to The Motley Fool.

USES ACROSS GENERATIONS

Shoppers considered Millennials and Generation Z are more

likely to consider using BNPL for everyday purchases, according

to 2024 data from PYMNTS Intelligence, a news provider focused

on payments. Meanwhile, the majority of Baby Boomers and seniors

said that they would not use BNPL for everyday purchases.

CREDIT SCORES

BNPL products attract a larger share of users whose credit

scores are subprime (between 580 and 619) or near prime (between

620 and 659), but about half of BNPL applicants have credit

scores that are either near prime or prime (above 660),

according to a 2023 LexisNexis Risk Solutions report, the most

recently available.

Because many BNPL lenders do not provide data to credit

reporting agencies, consumer advocates have warned that BNPL

debt is a blind spot for regulators, other lenders and BNPL

lenders themselves, and lacks consumer protections.

Last year, the CFPB began requiring BNPL providers to

investigate consumer disputes, refund products that have been

returned and provide periodic billing statements. The Trump

administration has since revoked this rule.