Dive Brief:
- Half of holiday shoppers plan to use buy now, pay later services to cover their expenses this holiday season, according to PayPal’s 2025 Holiday Shopping Survey of 1,000 U.S. adults. The respondents cited budget control and affordability as the top reasons for using the payment tool.
- More than half of respondents said they are more likely to make purchases when BNPL providers are available as a payment option, the survey found.
- One-quarter of Gen Z and millennial shoppers use BNPL services regularly, and a third have paid for a purchase using the service at least once, per the survey results.
Dive Insight:
Buy now, pay later is now a mainstream payment method, with Gen Z and millennials leading the way, per PayPal’s report.
Previous research has indicated that Gen Zers and millennials will rely on BNPL providers this holiday. Roughly 20% of shoppers from those generations said they expect to use BNPL during the 2025 holiday season, according to an Invoice Home survey released in July.
Last year, Gen Z used buy now pay later services more than credit cards during the holidays — a first for the J.D. Power survey.
“When shoppers know they can pay overtime, they're more likely to complete their purchase,” Michelle Gill, general manager of small business and financial services at PayPal, said in a statement. “PayPal data shows offering BNPL leads to a 91% higher average order value for enterprises and 62% higher for small businesses, meaning it isn't just a nice-to-have, it's a proven advantage to win.”
Though many consumers are turning to BNPL platforms to stretch their holiday budgets, some users are struggling to pay the installment payments. Nearly half of U.S. adults who have used BNPL services have had at least one financial hardship, according to a YouGov survey released in May. Of the BNPL users who responded to the survey, almost a quarter said they exceeded their budget, and 16% said they missed a bill payment after using BNPL to make a purchase.
