Buy now, pay later is no longer just for flat-screen televisions. Americans are splitting the cost of eggs, milk, and takeout into installments. And the federal agency built to protect them from predatory lending just stepped back from the fight.
Nearly a third of buy now, pay later (BNPL) users in the United States have used installment loans to cover grocery purchases, a figure that has roughly doubled from two years ago.
The trend reflects a broader financial strain across American households: President Trump’s economic approval rating has reached a historical low as rising costs squeeze consumer budgets, according to Navigator Research, a nonpartisan polling organization.
With 53.6 million unique BNPL users now active in the U.S. and more than $334 billion in global transaction volume recorded through 2024, the industry has moved well beyond its origins as a checkout-lane novelty for discretionary purchases.
BNPL services, which allow consumers to split a purchase into interest-free installments paid over weeks or months, first gained mainstream traction during the pandemic-era e-commerce surge.
Providers including Klarna, a Swedish fintech company, and Affirm Holdings, a San Francisco-based publicly traded lender, built their early businesses around furniture, electronics, and fashion.
The pivot to groceries and food delivery marks a qualitative change in how the product is being used: borrowing to finance consumption that recurs weekly, rather than one-time discretionary purchases that can be deferred.
Klarna Replaces Affirm at Walmart: What Shoppers Need to Know
The competition for grocery-adjacent BNPL volume is intensifying at the retail level. Affirm had previously expanded its partnership with Walmart to place BNPL financing at self-checkout kiosks across more than 4,500 U.S. stores.
“BNPL can be a helpful tool, but these numbers raise real concerns. When nearly half of users say they’ve paid late, it shows how thin many households’ margins are right now”, said Matt Schulz, Chief Consumer Finance Analyst at LendingTree.
The arrangement carried notable restrictions: minimum purchase requirements, defined financing limits, and explicit exclusions for grocery items themselves. Klarna is now set to debut its own services at Walmart, effectively replacing Affirm at the nation’s largest retailer.
The transition hands Klarna access to Walmart’s enormous foot traffic at a pivotal moment: the company recently deepened its partnership with Elliott Investment Management, a New York-based hedge fund, to a $2 billion credit facility to support its lending operations.
The Walmart switch is one data point in a broader retail embrace of BNPL. Costco Wholesale, the membership warehouse chain, added Affirm for online purchases of $500 or more in May 2025.
DoorDash, the food delivery platform, partnered with Klarna in March 2025 to extend BNPL options across food orders, grocery deliveries, and subscription services. The DoorDash integration is particularly notable because it brings installment financing directly to perishable, recurring purchases, the kind that cannot be returned if a payment is missed.
The Regulatory Vacuum: Who Protects BNPL Grocery Shoppers Now?
The expansion into essential goods is unfolding at precisely the moment the primary federal consumer watchdog has withdrawn from the field. The Consumer Financial Protection Bureau (CFPB), the agency created after the 2008 financial crisis to oversee lending practices, abandoned its effort to regulate BNPL services under the same rules that govern credit cards.
The retreat followed a successful legal challenge by the Financial Technology Association (FTA), an industry lobbying group whose members include major BNPL providers. The FTA argued the CFPB’s proposed rule violated administrative law on procedural grounds, and the bureau ultimately chose not to issue a revised rule.
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The practical consequence is that BNPL borrowers financing grocery runs lack the dispute-resolution rights, mandatory disclosure requirements, and late-fee caps that apply to credit card holders carrying similar balances.
Forty-seven percent of BNPL users reported making a late payment in the past year, a figure that represents a meaningful increase from prior years, the personal finance marketplace. The rate sits against a backdrop of real financial pressure: Navigator Research found that Americans across income brackets are reporting difficulty keeping pace with rising costs, a dynamic that appears to be pushing more households toward short-term credit products for non-discretionary spending.
Consumer advocates have pointed to the absence of federal oversight as a particular concern when BNPL migrates from big-ticket retail to food. A missed installment on a sofa carries financial consequences but no nutritional ones.
“Given its current scale, debt outstanding and observed default rates, the impact of BNPL on financial stability appears limited at present. While spillovers to other consumer credit markets are possible, there is no clear evidence of elevated stress to date”, added Zhu Wang, vice president for research in financial and payments systems at the Richmond Fed
A missed installment on a grocery order, if it triggers account suspension or penalty fees, intersects with food security in ways that credit card debt on the same items would not, given the dispute protections attached to card transactions.
The industry’s response to the regulatory retreat has been to pursue the architecture of regulated finance from a different direction. Several major BNPL providers are actively seeking formal banking charters, a move that would subject them to federal bank supervision while also granting access to lower-cost deposit funding.
Whether that path survives the current deregulatory climate in Washington is an open question: the Trump administration’s approach to financial oversight has broadly favored reduced regulatory burden on fintech firms, which could make charter-based supervision less stringent than consumer groups would prefer.
The structural shift in BNPL’s customer base, from consumers financing wants to consumers financing needs, is now embedded in the product roadmaps of the industry’s largest players.
Klarna’s Walmart debut and DoorDash integration, Affirm’s presence at Costco, and the $334 billion in annual global volume all point to an industry that has outgrown its original use case faster than the regulatory framework designed to govern it.
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