Empower: US BNPL use has grown to 91.5M users, with 25% financing groceries, as default rates accelerate and most loans aren't reported, creating “phantom debt”
* AI bubble — * Wall Street bitcoin — * Private equity bubble — * adding the Buy Now Pay Later bubble, which is ... largely untracked!! — techcrunch.com/2025/11/16/b... this feeds to my theory that the economy is screwed so we get *multiple* financial scams all at once Paul Rietschka / @prietschka : Klaxons going off about the state of the economy. [embedded post] @techcrunch.com : As Morris watches his BNPL investments from the other side of the table, he seems to understand the warning signs better than most. Forums: r/technology : ‘Buy Now, Pay Later’ is expanding fast, and that should worry everyone
Context & Ripple Effects
BNPL’s consumer-debt risks have been visible for years: earlier coverage recorded late payments and losses at major providers as conditions weakened, while a CFPB probe into BNPL debt accumulation and data practices put the sector under scrutiny.
The new figures add scale and a more essential use case to that arc. They sharpen concerns raised when consumer groups and lawmakers warned that BNPL could overextend younger and lower-income borrowers.
First-order effects
- BNPL providers face a more immediate credit-loss challenge as defaults accelerate across a user base reported at 91.5 million.
- Because most balances are not reported to credit bureaus, borrowers’ BNPL obligations can remain outside the credit files used to assess their broader debt load.
Second-order effects
- Lenders making other consumer loans may have a less complete view of applicants’ repayment commitments, complicating underwriting where BNPL balances are material.
- The combination of grocery financing and rising defaults is likely to intensify regulatory and consumer-advocacy attention on a sector already associated with competition, regulation, and consumer-debt concerns.
Third-order effects
- If BNPL borrowing continues to expand without consistent credit reporting, consumer-credit risk could become more fragmented across lenders and harder to assess in aggregate.
- Sustained losses or evidence of hidden borrowing could strengthen the case for more standardized disclosure and reporting rules, though the corpus does not establish what action regulators will take.
The trend: BNPL is shifting from a discretionary retail payment option toward a larger, less visible layer of household credit, increasing pressure to make its risks legible across the lending system.