Buy Now, Pay Later (BNPL) payment plans are an extension of credit to consumers provided at the point of sale, often at no cost to the consumer. The option for free loans has fed the rapid adoption of BNPL, influencing the product plans for credit card issuers, merchants, networks and processors. Merchants and issuers want to do business with younger consumers who do not have credit cards or who are concerned about accruing debt, as well as more established buyers who value the opportunity to stretch payments over several weeks. Mercator Advisory Group analysis finds the U.S. BNPL market has grown from a negligible level just three years ago to an estimated $39 billion in purchases in 2020.

As much as BNPL has and will continue to upend traditional forms of credit, it is also having an influence on debit cards and ACH as forms of repayment, a topic that until now has been largely overlooked.