Buy now pay later, which allows users to purchase items and pay for them in the future, has come under pressure in recent months as consumers slow their spending and regulatory pressure mounts, with aData from the CFPB report suggests that BNPL loans in the U.S. soared 970% between 2019 and 2021, to 180 million transactions among the five major lenders, with the value of those loans jumping 1,092% to $24.2 billion.
But as the model skyrocketed in popularity during the pandemic, the CFPB also said that late fees are mounting. In 2021, 10.5% of users were subject to at least one late fee, up from 7.9% in 2020.Shares of Affirm, PayPal and Block have tumbled more than 48% this year amid the broader market sell-off, and sit at least 65% off their 52-week highs.