Adobe expects US BNPL spending to grow 11.4% YoY to $18.5B in Q4 2024; the Federal Reserve Bank of Philadelphia says most BNPL users make their payments on time
As Amazon's Prime Day kicked off the holiday shopping season this week, U.S. consumers are expected to spend a record $18.5 billion using buy …
Context & Ripple Effects
Adobe’s forecast extends a pattern already visible in its prior holiday data: BNPL accounted for a record $16.6 billion of 2023 online holiday sales. BNPL’s record holiday contribution in 2023 provides the closest baseline for the projected Q4 increase.
The projection arrives after Amazon’s 2023 Prime Day, when Adobe reported growing use of installment services even as event sales growth trailed expectations. Growing BNPL use during Prime Day suggests the payment method is becoming embedded in major promotional shopping periods, not confined to year-end.
First-order effects
- BNPL providers and participating merchants enter Q4 expecting a larger volume of installment-financed online purchases, with Adobe projecting $18.5 billion in U.S. spend.
- The Philadelphia Fed’s finding that most users pay on time supports the near-term case that increased usage is not, by itself, synonymous with broad repayment distress.
Second-order effects
- Retailers may have greater reason to feature BNPL at checkout during holiday promotions, making payment-option placement more consequential for conversion and basket size.
- Higher transaction volume raises the importance of underwriting and repayment performance for BNPL providers: timely payments can support expansion, while any deterioration would quickly affect merchant and consumer access.
Third-order effects
- If holiday growth persists alongside stable repayment behavior, BNPL could become a more routine layer of U.S. online checkout rather than a promotional add-on; whether that holds depends on credit performance as usage broadens.
- The combination of rapid spending growth and consumer repayment data will keep attention on how installment products are assessed and presented at checkout, particularly as they become more central to retail demand periods.
The trend: BNPL is moving from a sale-event payment alternative toward a recurring component of online retail checkout, with credit performance determining how durable that shift is.