TechCrunch Industry News ‘Buy Now, Pay Later’ is expanding fast, and that should worry everyone
Dec 26, 2025
Nigel Morris raises alarms about the rapid growth of 'Buy Now, Pay Later' (BNPL), particularly its use for everyday essentials like groceries. With 91 million Americans using BNPL and rising defaults, many are missing payments, creating what he calls 'phantom debt.' The podcast explores troubling statistics showing that borrowers often hold multiple BNPL loans, mostly skewing towards subprime credit. It highlights regulatory challenges and warns that without careful oversight, the lightly regulated BNPL could lead to widespread financial distress.
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BNPL Growth Masks Rising Consumer Strain
- Buy Now Pay Later (BNPL) use has surged to over 91 million U.S. users and is increasingly used for essentials like groceries.
- Rising late payments and defaults show BNPL is concentrating risk among financially stressed consumers.
Phantom Debt Hides Borrowers' True Exposure
- Most BNPL loans are not reported to credit bureaus, creating 'phantom debt' invisible to other lenders.
- This lack of visibility lets consumers accumulate multiple BNPL loans across platforms without detection.
Data Shows Heavy, Subprime BNPL Use
- CFPB data showed many BNPL users take multiple simultaneous loans and some are heavy monthly users.
- A large share of BNPL borrowers have lower credit scores and subprime approval rates are high.