Number of Consumers Using BNPL to Pay for Groceries Has Nearly Doubled

Data from an April LendingTree report shows that 25 percent of buy now, pay later (BNPL) users have used the service to buy groceries, up from 14 percent a year ago. Lending services like Affirm, Afterpay, Klarna, and PayPal have risen in popularity in recent years as cash-strapped consumers look for ways to stretch their wallets.

“Lower-income households are facing much tougher financial choices than middle- and upper-income families,” Arun Sundaram, vice president and senior equity analyst at CFRA research, told FOX Business. “When short-term cash flow takes priority over long-term financial stability, it can signal deeper financial stress that may have ripple effects down the road.”

BNPL products have traditionally been used for big-ticket items, which allows consumers to make purchases and pay in installments, typically with no interest or fees. Consumers only get hit with interest for some extended payment plans and pay late fees if they miss a payment. Research shows that over 40 percent of BNPL users paid late in the last year, up from 34 percent a year ago.

Matt Schulz, LendingTree chief consumer finance analyst, said that the data from the report is “clearly a sign that people are struggling and are looking for ways to extend their budget a little bit in the midst of higher prices and general economic uncertainty.”

From 2020 to 2024, the all-food consumer price index (CPI), a measure of how much everyday goods cost, rose 23.6 percent and outpaced the entire index. The beginning of this uptick was largely due to COVID-19 related supply chain issues, outbreaks of the avian influenza, and the Russian invasion of Ukraine.

Although food price growth slowed down in 2023 and 2024 due to wholesale prices and other inflationary factors, some are fearful that President Trump’s trade war could cause another increase in food prices.