Buy now, pay later (BNPL) services are set to play a major role in this year’s holiday spending, with half of US shoppers planning to use them to manage their budgets, according to PayPal’s 2025 Holiday Shopping Survey.
The survey of 1,000 US adults found that affordability and budget control are the top reasons consumers are turning to BNPL tools.
More than half of respondents said they’re more likely to make a purchase when BNPL is available as a payment option.
Younger shoppers are leading the trend: one in four Gen Z and millennial consumers use BNPL regularly, and one-third have used the service at least once.
“When shoppers know they can pay overtime, they’re more likely to complete their purchase,” said Michelle Gill, general manager of small business and financial services at PayPal, in a statement.
“PayPal data shows offering BNPL leads to a 91% higher average order value for enterprises and 62% higher for small businesses, meaning it isn’t just a nice-to-have, it’s a proven advantage to win.”
The findings reinforce BNPL’s growing mainstream adoption, particularly among younger generations.
A July survey from Invoice Home found that 20% of Gen Z and millennial shoppers expected to use BNPL this holiday season, while last year’s J.D. Power report revealed Gen Zers used BNPL more often than credit cards for the first time during the holidays.
However, not all users are managing repayments smoothly.
A YouGov survey released in May found that nearly half of BNPL users had experienced at least one financial hardship after using the service. Around 24% said they exceeded their budgets, and 16% reported missing a bill payment.
Despite those challenges, PayPal’s data suggests retailers offering BNPL options stand to benefit from stronger conversions and higher order values as consumers look for flexible ways to spread the cost of their holiday spending.
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