The news: During Amazon Prime Day, shoppers used buy now, pay later (BNPL) plans 20% more than they did last year, per Adobe Analytics.
Why this matters: Much of this BNPL volume likely went to Amazon’s partner Affirm. Affirm is directly integrated within Amazon Pay, putting it front and center at checkout. The BNPL player’s growth has cooled over the past year, but these sales likely helped it regain momentum.
Amazon also has a BNPL partnership with Citi; select cardholders can access Citi Flex Pay in their Amazon Pay wallets. Citi likely benefited from the sale as well, boosting its BNPL strength.
Zooming out: Despite some BNPL firms losing momentum over the past year, overall use is still trending up.
The challenge: The spike in BNPL use over Prime Day—as well as overall growth—raises some concerns.
Consumers may be overextending themselves: 42% of US users said they’ve made a late payment on a BNPL loan, per March 2022 polling by LendingTree. And because most BNPL payments aren’t reported to credit bureaus, consumers can take out multiple loans across providers to make ends meet, which increases their chances of defaulting.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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