New Study: Gen Y and Z Are Driving BNPL Growth

Snapshot: Buy now, pay later (BNPL) services are becoming the preferred payment method for younger consumers, with 42% of Gen Y and Gen Z using these products—double the rate of older generations, according to J.D. Power’s annual BNPL satisfaction study. These groups favor BNPL over traditional credit cards primarily due to what they see as more favorable repayment terms. Among BNPL lenders, card-based installment plans from major issuers continue to score the highest in customer satisfaction, with American Express Plan It leading the rankings, followed by Chase and Citi Flex Pay.

J.D. Power’s findings indicate that Gen Y consumers are the most satisfied BNPL users, scoring 627 out of 1,000, while Gen X follows closely behind at 620. Klarna is the highest-ranked non-card-based BNPL provider, with a satisfaction score of 638. Meanwhile, fintech BNPL brands like Zip and PayPal saw the largest year-over-year declines in satisfaction, linked to a rise in customers struggling to make payments. These struggles contributed to an overall 13-point decline in BNPL satisfaction across all providers.

As BNPL adoption grows, legacy card brands may still have an edge, but that could change.

Key quote: "Card-based installment plans benefit from stronger consumer trust today, but as fintech brands gain traction, we expect that gap to narrow." Sean Gelles, Senior Director of Banking and Payments, J.D. Power.

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