American consumers and BNPL: Experience, spending, and troubles
- More than one in four Americans used BNPL in the second half of 2022.
- Providers, consumers, and regulators are still learning about the specifics of BNPL — providers to improve customer experience and grow revenue, consumers to simplify purchases, and regulators to protect customers.

Just a couple of months ago, there was a lot of talk about how regulators want to clamp down on BNPL. While that’s still in the oven, the holiday season has been seeing a surge in Americans checking out with BNPL. That on its own is perhaps an alarming indicator of where the economy stands today, and where it’s headed.
But for the purposes of this article, we’re more interested in looking specifically at people’s relationship with BNPL. How many use it, how often, for what reason, and when – these are the questions we’re asking. A Consumer Reports survey of 6,500 American adults gets us some of the answers.
The survey, conducted in H2 2022, found that 83% of the respondents had heard about BNPL. Additionally, around 28% actually went ahead and availed the service – that’s up 55% from the agency’s finding in a January 2022 survey.
In the same time frame, the number of respondents who had never used BNPL was down by over 12%.
But how often have Americans used BNPL? For the vast majority, 2 to 5 times.
Consumers use BNPL to acquire a variety of products and services. According to the survey, the bulk of BNPL spending is on clothing (30%), electronics (22%), appliances (11%), and home furnishing (11%). While these are the top four markets, others include entertainment, cosmetics, travel, leisure, and personal care.
BNPL is also increasingly being used for more expensive purchases. When asked about the value of their last BNPL purchase, more than 71% of the respondents reported it being over $100. The most popular price range was $100-$249, reported by 29% of the respondents.
In terms of satisfaction from the service, Americans rate BNPL highly. The majority of the respondents (58%) reported being highly satisfied with their BNPL experience, while another 27% found themselves somewhat satisfied. A mere 6% said they were somewhat dissatisfied, while just 3% said they were highly dissatisfied.
This obviously translates into a strong general desire to use the service more – no surprise even Apple wants in on the business.
43% of the respondents said they would definitely use BNPL again, while an additional 45% said they probably would. On the flip side, just 2% felt strongly about not using BNPL in the future, while another 10% said they probably won’t.
Across racial lines, we learned that minorities were far likelier to use BNPL.
This could be for a number of reasons, but chief among them is that BNPL brings easier credit to racial minorities, who are otherwise underserved by traditional finance. Neither does BNPL require a credit history (yet), nor does it usually charge interest, granting greater access to financing for minorities.
The most popular reason people use BNPL is because they don’t have the funds to purchase something at a given point in time (45%). Another 44% said that they simply prefer to pay in installments rather than lump sum, while 18% of people used it purely out of curiosity about the service.
Other reasons include consumers thinking BNPL would have lower interest rates than a credit card, or that it is easier to use than a credit card, and lastly that they don’t own a credit card. In fact, the bulk of the BNPL payments were made as a substitute for credit card transactions, which is evident in the fact that most BNPL payments were made using a debit card.
Around 54% of the respondents said they used a debit card to complete a BNPL transaction. The second most popular method was through direct payments from a bank or credit union account, at 27%, followed by credit cards at 24%. Other methods used are prepaid cards (3%) and checks (3%).
The bulk of these payments were made through recurring automatic payments (69%), with manual payments only used by 29%. Automatic payments are more popular among younger consumers, 77% of whom preferred them, while manual payments are more popular among those 60+ in age, who claimed 40% of them. A simple reason for this is that younger people are more receptive to digital methods and more comfortable adopting solutions like automatic payments.
People are offered BNPL at many different touchpoints, but the most attractive one, it appears, is at the time of purchase.
Now, let’s review the problems consumers report with BNPL.
Right off the bat, it is interesting to see that up to 30% of BNPL users said they were unaware of at least one fee they were charged. Consumers appear to be lured in by the appeal of interest-free loans, but in the process tend to miss the fees that providers do charge.
72% of consumers reported never having any issues with BNPL payments. Among the rest, 11% reported missing at least one payment, 6% reported being charged an unexpected fee, 5% reported trouble with refunds for products never received, and 4% complained about being overcharged.
Let’s take a closer look at missed payments. As expected, the number one reason for that was an overestimation by consumers of their ability to make the payments.
Missed payments definitely come with a penalty in the BNPL industry. However, due to little regulation, different providers deal with missed payments differently. In consumers’ experience, 53% reported being charged for missing a payment, 28% said they were charged interest, 26% found their spend limit reduced, 21% had their debt sent to collection agencies, and 15% said it appeared on their credit report.
Another 11% found themselves barred from using the service altogether.
BNPL is as yet a developing space, despite its prevalence. Providers, consumers, and regulators are still learning about the specifics of the industry — providers to improve customer experience and grow revenue, consumers to simplify purchases, and regulators to protect customers. In all these situations, customers are central, and hence surveys like this one are hugely valuable.