The global BNPL market size is expected to grow from a value of $37.2 billion in 2024 to $167.6 by 2032, and this significant market opportunity appears to be showing all the signs of a strong long-term investment opportunity. 

Along with broadening business consumer bases, BNPL solutions have been found to leverage larger average order values and increase retailer conversion rates. 

The buy now, pay later boom is also gaining more traction as the cost-of-living in the United States and other global economies has continued to rise. This has paved the way for more customers to make large purchases while spreading the cost, usually without a significant associated interest rate. 

Data also suggests that BNPL financing options had grown some 23% between January and November 20, 2024, in comparison to the same period in 2023. Not only were more than 94% of buy now, pay later users repeat customers, but around half who used BNPL in the last 12 months were under the age of 35. 

This underlines the customer lifetime value of BNPL adoptees, with the likelihood of young users of the services continuing to look for buy now, pay later options throughout their lives as consumers far higher. 

Adoption trends also help to show signs of a continuation of the pandemic boom that many BNPL lenders experienced as the major payment trend broke out into mainstream usage. 

Between 2019 to 2021 BNPL loans from five major lenders saw astounding growth of more than 970%, a rate that underlines its rapid rise in popularity. 

The Long-Term Potential of BNPL

Buy now, pay later technology can make a strong case to be one of the fintech landscape’s biggest success stories. 

Offering customers an easy alternative to traditional payments, BNPL has become commonplace and an effective solution for consumers at a time when historically high inflation rates have caused a cost-of-living squeeze. 

With technology allowing consumers to make an online or in-store purchase with payments spread out over a predetermined period, the low or 0% financing options provided by services can be viewed as a valuable tool for supporting consumer spending power. 

There’s even no need for an initial credit check, helping to make the process more frictionless at the point-of-sale. Instead, soft credit checks based on accessible spending analysis and bank account information are sufficient for a wider range of consumers to be granted credit. 

As a USP, the widespread access to credit with minimal associated fees makes BNPL a transformative innovation in the world of credit, and Wall Street is currently witnessing a race among the industry’s most innovative providers for market dominance. 

Investment Opportunities in BNPL

Behind the whirlwind rise of generative AI, fintech has a strong case as Wall Street’s other strongest tech innovator today. As a result of BNPL’s success, there’s no shortage of stocks seeking to gain a market foothold in providing services to customers. 

Already, we can see signs of progress among the industry’s market leaders, and the following stocks are particularly well-positioned to make the most of the rapid growth of the industry: 

Affirm Holdings (AFRM)

As a BNPL market leader, Affirm Holdings (Nasdaq: AFRM) has doubled in value since the beginning of H2 2024, and its commitment to providing transparent buy now, pay later loans without hidden or late fees has helped to build positive sentiment around the stock. 

The profits made by Affirm on its BNPL loans come from the interest paid on loans with extended repayment plans for the users who don’t use the firm’s four interest-free installments as its core offering. 

Affirm’s fundamentals are looking strong, too. Beating consensus estimates in the fiscal Q1 2025 for both revenue and loss per share, it’s clear that the company is compounding its growth. 

The firm’s revenue beats were substantial, posting $698 million in revenue against the $664 million expected and recording a loss of $0.31 per share compared to the expected $0.35. 

With Affirm expected to achieve profitability on a GAAP basis in its fiscal fourth quarter of 2025, the firm’s massive user base of over 18 million customers has room for further growth should its BNPL services continue to hold favor among consumers. 

PayPal (PYPL)

As one of the world’s biggest names in fintech, PayPal (NASDAQ: PYPL) is another formidable player that investors should take seriously in the buy now, pay later space. 

With an astonishing 426 million active accounts and the ownership of the P2P payment platform Venmo, PayPal is a serious contender on Wall Street. 

The stock grew more than 44% in 2024, and its 11 years of BNPL experience makes PayPal a key player in the industry. 

The future looks bright for PayPal’s buy now, pay later strategy, with the company making a series of strategic acquisitions to grow further into the sector. With around 25 million active users worldwide using BNPL options for purchases on PayPal’s platform at a total transaction volume of $20 billion, it’s clear that PYPL will be a major player in the growth of BNPL services. 

Investors may also be treated to a discounted purchase price following the release of PayPal’s fiscal Q2 2025 earnings, which showed expectation-beating growth but sparked sell-offs due to the news that payment transactions fell 3% to 6.6 billion.

Despite this, PYPL’s revenue beat of $8.37 billion against the $8.26 billion expected for the quarter underlines the firm’s unwavering presence at the forefront of fintech innovation. 

Riding the BNPL Wave

Buy now, pay later has emerged as an essential service at a time when the cost of living is challenging the economic comfort of consumers around the world. 

Winning favor with younger consumers, the technology looks to have a strong lifetime value among repeat users that could sustain the growth of the industry as a whole. 

As a result, BNPL appears to make a strong case as a hotbed of attractive long-term investment options on Wall Street. At a time when more investors are looking to diversify their tech holdings away from their AI dependency, buy now, pay later stocks could offer plenty of value.

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