American Banker’s 2026 BNPL Tradeoff Survey: Exploring the Pros and Cons of This Emerging Lending Trend
In a world increasingly turning towards digital options for financial services, the buy now, pay later (BNPL) trend is gaining momentum. This alternative lending option has caught the attention of consumers and financial institutions alike, sparking a race among banks, credit unions, neobanks, and payment firms to tap into this emerging market. The American Banker’s 2026 BNPL Tradeoff Survey, conducted online in March of 2026, offers valuable insights into this trend. The survey collected responses from 186 banking professionals across various roles and financial institutions.
The survey revealed some interesting dynamics about the current state of BNPL offerings across different institutions and the factors influencing their adoption or rejection.
This article is the first in a series exploring the research findings from the American Banker survey. Be sure to check out the upcoming parts for more in-depth analysis.
Who (and how) is Your Institution Offering BNPL to Consumers?
The survey showed a split among financial institutions on BNPL offerings. Approximately 44% of respondents reported offering BNPL services, either through proprietary platforms, white-label solutions, or partnerships with firms like Affirm and Klarna. A smaller share (15%) indicated plans to introduce BNPL within the next 12 months, while nearly half of the respondents have no immediate plans to offer BNPL services.
When analyzed by institution type, 72% of national banks, 54% of regional banks, 18% of community banks, and 11% of credit unions are currently offering BNPL services. Regional banks relied heavily on partnerships for their BNPL offerings (24%), while credit unions were the least likely to offer these services (68%).
Consumer demand is a significant factor pushing institutions to explore BNPL options. For instance, last year, U.S. Bank launched its BNPL product, Split Card, which allows customers to convert purchases into three-month installment plans. Split Card has been particularly popular among the Gen Z demographic, highlighting the potential of BNPL in attracting younger consumers to traditional banking institutions.
What is Driving BNPL Adoption Among Banks and Credit Unions?
Staying competitive in the fast-paced financial industry is the top reason for institutions to consider offering BNPL (76%). Other key motivators include revenue generation (47%), cross-selling other products/services (43%), building merchant relationships (28%), and embedding finance into partner ecosystems (27%).
The growing popularity of BNPL is evident from the Consumer Financial Protection Bureau data, which shows a significant increase in BNPL loan origination volume from $2.7 billion in 2019 to more than $45 billion in 2023. This growth is also reflected in strategic partnerships, such as the one between Fiserv and Affirm, which allows banks and credit unions to offer BNPL loans on their debit cards.
What is Giving Banks Pause on Offering BNPL to Consumers?
Risk and regulatory concerns top the list of reasons why some institutions are hesitant to offer BNPL (22%). Other factors include BNPL not being a priority (19%), not aligning with the institution’s strategy (18%), and lack of customer demand (12%).
Given the highly regulated nature of the banking industry, it’s not surprising that institutions would express concern about potential regulatory risks associated with newer offerings like BNPL. Recent actions by state attorney generals and proposed rules by New York’s governor around the licensing and regulation of BNPL lenders underscore these concerns.
In conclusion, the 2026 BNPL Tradeoff Survey provides valuable insights into the current trends and future potential of BNPL in the banking industry. As consumer demand for flexible payment options continues to grow, it will be interesting to see how financial institutions navigate the opportunities and challenges presented by BNPL.
For more details on the survey findings, click here.
