American Banker’s 2026 BNPL Tradeoff Survey: An Analysis
The American Banker’s 2026 BNPL Tradeoff Survey provides a comprehensive perspective on the buy now, pay later (BNPL) landscape in the banking sector. Conducted in March 2026, the online survey drew responses from 186 banking professionals from diverse roles across banks, credit unions, neobanks, and payments firms.
The Credit Risks of BNPL
A key takeaway from the survey is the potential credit risk that BNPL presents to banks and credit unions. Approximately 90% of respondents working at banks offering BNPL indicated that these lending products pose some degree of credit risk to their institutions, while only 9% believed BNPL carries no risk.
This concern is understandable, given the nature of BNPL loans. While they provide more manageable payments over time, this does not necessarily guarantee higher repayment and spending rates. Traditional credit scoring systems are not equipped to accurately capture the very short-term nature and structure of BNPL loans. As a result, incomplete reporting of BNPL loans could complicate lenders’ understanding of applicants’ total debts and other obligations, making it difficult to make informed credit decisions.
BNPL: A Threat to Credit Card Revenue?
Another major concern among banking executives is the potential impact of BNPL on credit card revenue. The survey revealed that 25% of the respondents view BNPL as a credible threat to credit card revenue. However, opinions vary with the type of institution. For instance, 16% of national banks and 33% of regional banks view BNPL as a significant threat to credit card revenue. The figure is even higher for credit unions, with 40% perceiving BNPL as a significant threat.
The rise of BNPL has indeed put pressure on traditional credit card issuers, pushing them to explore alternative credit sources such as BNPL. However, it is important to note that some banks are integrating BNPL functionality into their existing credit products to regain their customers while still meeting their spending flexibility needs.
BNPL Providers: A Threat to Banks and Credit Unions?
One of the key findings from the survey is the perceived threat of BNPL firms to banks and credit unions. Credit unions were the subgroup with the highest percentage of respondents identifying BNPL firms as significant threats. This reflects the growing competition in the financial services market, with BNPL firms offering products more closely aligned with consumer needs.
However, it is also important to note that these perceived threats can drive banks and credit unions to adapt through new offerings or outside partnerships, further fueling innovation in the financial services industry.
The Compliance Challenges with BNPL
Offering BNPL also comes with compliance challenges. The survey highlighted partner liability/oversight, regulatory ambiguity/unclear guidance, and setting and enforcing underwriting standards as the top three compliance issues banks face when offering BNPL.
Institutions with the capacity to do so have preferred to develop BNPL lending offerings in-house to avoid potential vulnerabilities through outside partners. However, it is crucial for institutions to implement stricter monitoring and risk models, strict credit controls, and limits and guardrails to effectively manage the risks associated with offering BNPL.
For more details about the American Banker’s 2026 BNPL Tradeoff Survey, click here.
