From PayPal to Splitit, Earnings Season Underscores BNPL’s Wide Embrace

There have been speed bumps for buy now, pay later.

PYMNTS’ own data shows that the opportunity is significant for BNPL providers: Research shows 2.8% of online retail purchases completed with buy now, pay later as of Q4.

But BNPL’s presence within retail spending overall is still embryonic, at about 1.2%.

Though the percentage share is unchanged between the third and fourth quarters, as we’ve found, as retail spending grows, the read-across is that BNPL volumes are also growing.

The recent spate of earnings reports underscored those developments.

As of this writing on Friday (Feb. 24), consumer spending grew by 1.8% in January, seasonally adjusted — the largest jump in about two years. Inflation is running hot, as measured by the personal consumption expenditures index, which gained 5.4% in January versus a year ago and a slight acceleration from December’s gains. And spending with the money on hand (that is, through debit/checking accounts) can help consumers manage their cash flow more adroitly.

The stats below show a general trend of growth — in the triple digits in some cases, and slowing growth for other companies, such as Affirm. Management commentary has stated that losses remain manageable, but delinquencies are rising from recent lows.


Block, the company formerly known as Square, said that BNPL contributed $132 million in revenues in the quarter, according to company materials,

As noted in our earnings coverage Thursday, the company expects gross merchandise volume (GMV) growth of 19% year over year, an improvement compared to 14% growth in the fourth quarter.

Losses on that business, they say, are manageable, and Chief Financial Officer Amrita Ahuja noted that the loss rate on consumer receivables was below 1% in the quarter — and similar rates are expected in the current period. BNPL, of course, is embedded within Cash App and Square itself, and we noted that the number of Cash App users has been growing, up 16% in the most recent quarter to 51 million monthly transacting users.


Splitit’s own results, released at the end of last month, show that merchant sales volume (MSV) was $141 million in the fourth quarter of 2022, gaining 9% year on year. The earnings supplementals show that the company has identified $2 billion to $4 billion in incremental merchants sales volume opportunities through the next three years. And during the conference call with analysts, management spotlighted the inroads its white-label model has made with client firms such as Shopify and 

CEO Nandan Sheth said that “the ability to be plugged into a payment platform’s API infrastructure gives us a huge advantage … because we have the ability to be turned on and off by existing merchants that are using”


BNPL’s growth has been in the triple digits for PayPal. As noted here, CEO Dan Schulman said, “is driving significant lifts in checkout and incremental TPV [total payments volume].” Since its launch three years ago, the company has extended 200 million loans to over 30 million consumers and counts 300,000 merchants among its BNPL roster.

The company’s BNPL tally within its TPV stands at $20 billion through the last year, up more 160% year over year, and as the transaction count grew by more than 200%. 

Later in the call, management said that for the quarter, BNPL TPV grew 102% to $7 billion of TPV and the company grew share, per call commentary.


Among the BNPL names in our pantheon, Affirm was most vocal about a deceleration in consumer demand and, in some cases, outright declines in spending on discretionary items (Block noted, conversely, that demand was picking up into the initial months of 2023). 

Affirm said that in the most recent quarter, there had been a slowing in gross merchandise volumes growth rates to 27% in the FY 2023’s second quarter, whereas a year ago, that rate had been 115%. Active consumers grew 39% in the same period to 15.6 million; growth in that metric in the year ago FY 2Q was 150%, per company supplementals. Revenue growth was 11%, at $400 million, and had been 77% last year.


Sezzle’s December 2022 business update said total revenues were up 15.7% to $13.6 million. The company said that its Premium offering had 122,00 active subscribers — and the subscriptions have been stable. In recent coverage, we reported on partnerships and expansions: Sezzle is now offering its credit-building service Sezzle Up in Canada. The offering allows users to report their payment behavior to credit reporting agencies, which helps them build credit files.  


Klarna said that BNPL trends are strong in the U.S. The company, based in Sweden, has said that had seen a 71% increase in gross merchandise value (GMV) in the United States last year, with more than 8 million monthly active users.