BNPL’s Debt Surge Is a Counterparty Risk, Not a Consumer One

Buy Now, Pay Later (BNPL) financing reached an estimated $70 billion in U.S. transactions in 2025, and a rise in consumer late-payments is moving the credit-risk question onto the businesses that fund and rely on these platforms, not just the shoppers using them.

Why it matters: If you lend to or sell through a BNPL provider, your real exposure is the provider’s solvency, not the consumer’s.

Where the credit risk actually sits

BNPL moves the point of risk away from the shopper and onto the companies financing the transaction.

• BNPL providers including Affirm, Klarna, and Afterpay assume the consumer credit risk and run collections, so merchants get paid upfront while the provider carries the receivable, as the Federal Reserve Bank of Richmond describes.
• Private credit funds and securitization investors hold much of that paper, packaging BNPL receivables into asset-backed securities and absorbing the losses when repayment streams fall short.
• BNPL reached an estimated $70 billion in 2025 transactions, about 1.1% of U.S. credit-card spending, but the concentration of that volume in a handful of providers makes each one a meaningful counterparty.

What the numbers are signaling

Headline default rates stay low, but the leading indicators are moving the wrong way.

• LendingTree’s 2026 survey found 47% of BNPL users paid late at least once in the past year, up from 41% in 2025 and 34% in 2024.
• The CFPB reported a BNPL charge-off rate of 1.83% in 2023, below the credit-card rate, with the average late fee at $9.99.
• The Richmond Fed found no clear evidence of rising aggregate charge-offs yet, but warned that light underwriting and the absence of credit-bureau reporting make BNPL exposure hard to measure.

Why B2B creditors should treat this as counterparty risk

The businesses exposed to BNPL are lenders, investors, and merchants, not the consumers making the purchases.

• Lenders and private credit funds financing BNPL receivables face nonpayment risk if a provider’s credit losses outrun its capital.
• Merchants that route a growing share of sales through one BNPL platform concentrate their receivables with a single counterparty.
• Trade credit and nonpayment insurance can cover a counterparty’s failure to pay, subject to credit limits, notification requirements, and policy terms in place at the time of loss.

What to do now

Treat BNPL exposure the way you would any concentrated counterparty and act before losses build.

1. Identify every BNPL provider your business finances, invests in, or depends on for payment, and size the exposure to each.
2. Monitor each provider’s delinquency trend, allowance for credit losses, and funding structure, not just its headline default rate.
3. Review whether your trade credit or nonpayment policy covers fintech and financial-institution counterparties, since many policies exclude them.
4. Contact Securitas Global Risk Solutions to structure coverage for your BNPL and private credit exposure.

Disclaimer:
This blog post is meant to be informative and provide helpful tips and insights into credit insurance policies. It is not meant to supersede any policy requirements. Please consult your credit insurance policy for all requirements including claim filing deadlines and required documentation.

Since 2004, Securitas Global Risk Solutions, LLC has helped clients develop trade credit and political risk transfer solutions. As an independent brokerage, Securitas is focused on developing comprehensive solutions that meet client needs, ensuring a complete understanding of policy wording and delivering excellent responsive service. If you want to understand how trade credit insurance can protect your business, contact Securitas Global Risk Solutions to speak with a specialist.