Chase, PayPal and more are racing to get BNPL options in front of more customers
Banks, platforms and payment services are smoothing out ways for customers to use buy-now, pay-later products for e-commerce transactions after continued growth in the first quarter of 2025.
Kate Major, executive director of partnerships at JP Morgan Chase, told Modern Retail at Shoptalk in Las Vegas last month that Chase has been looking for ways to offer more services to its payments customers. Most recently, that has meant rolling out more BNPL access. On March 25, J.P. Morgan Chase announced a partnership with Affirm that will allow merchants who use its payments platform to offer the BNPL service at checkout. It previously announced a similar agreement with Klarna.
“We’ve been getting asked since buy-now, pay-later began to take off if we have that available, and we’ve had to point to other partners we’re leveraging,” Major said. “So, it will be nice to be able to say, ‘Yes, you can sign up directly us.’ It’s something our merchants have been asking for, for a while, so it will be good to catch up.”
The additions come as price-conscious shoppers continue to increasingly adopt BNPL services as a way to finance purchases. Data shared with Modern Retail from Earnest Analytics shows that the combined gross payments from 29 different BNPL lenders rose by 22.6% year-over-year from January 1 through March 29. The first quarter of 2024, for comparison, saw a 31.8% year-over-year growth in overall gross payments.
In turn, online merchants and fintech providers are looking for ways to get more BNPL options in front of customers, like DoorDash adding Klarna for products of $35 or more, or GameStop rolling out Zip. Citi Pay is looking to scale with more merchants and growing about 20% month over month. Block-owned Afterpay in March officially rolled out its rebrand to Cash App Afterpay, a move that aims to capitalize on the reach of the popular wallet app.
But the services that power those transactions will be walking a careful line of growing at a time when fintech stock prices are dropping. Klarna has reportedly paused its IPO amid concerns about inflation under new U.S. tariff policies.
PayPal, for its part, commanded about $33 billion in BNPL transactions last year. But president and CEO Alex Chriss said during the company’s latest earnings call in February that PayPal sees BNPL as a way to expand its share of wallet. BNPL customers on average spend about 30% more than other customers, he said.
“Merchants see higher sales after adding BNPL messaging to their sites, which is critical when one more sale can make all the difference,” Chriss said. “We have a lot more we can do with BNPL in the next year.”
Nandan Sheth, CEO at white label BNPL firm SplitIt, said the company recently revamped its partnership with Shopify to offer more white-labeling for merchants to tap new demand. The offering used to redirect customers to an outside page to authorize their payment, which depressed conversions, Sheth said. But a new version developed over the last six to eight months now ensures the customer approval process happens in-app. It’s positioned as part of the credit card entry process.
“It allows us primarily to do embedded, card-linked installments without the consumer having to be redirected. By doing that, we feel we’re going to get a much better conversion,” Sheth said of the update.
SplitIt works by offering customers the option to finance a purchase in installments using an existing credit card. This allows customers to split up a bigger purchase over time, rather than putting it all on their card at once, but still reap the benefits of points or other card-centric benefits, Sheth said. This may be a customer who could afford to pay in full but would rather space it out to leave room on their card for other purchases or keep rotating balances low. Sheth said this means SplitIt is targeting a different cohort of customers than other BNPL players, particularly shoppers who have substantial credit limits.
This also has the benefit of not taking on as risky customers as some fintech players may do. The Consumer Financial Protection Bureau said in January that nearly two-thirds of BNPL loans went to borrowers with lower credit scores.
“We target the cohort that is very credit rich, has a FICO of over 600 and has 80% of the purchasing power in the United States. So we’re not really competing with consumers that need a loan to buy a $250 pair of sneakers,” he said.
Overall, Sheth said price-conscious consumers will be looking for ways to finance in the months ahead — even those who are high earners with access to credit. In response, he sees merchants deploying options like SplitIt playing alongside offerings like Affirm or Klarna.
“We think it’s bad idea to try to limit the consumer options,”he said. “You need to be balanced, but you need to give consumers options.”