Buy Now, Pay Later Explained

About one in six adults used buy now, pay later last year, and slightly more than a quarter of them paid late at least once, in a central bank's household survey. The companies' own filings show how the button brings in billions, why most of it stays out of credit records, and three checks before you tap the button.

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About one in six adults used buy now, pay later in the past year, and slightly more than a quarter of them paid late at least once. We follow the money: the merchant fee (about 2.3% of volume at Affirm), Klarna's take rate on all of its revenue (2.7%), Affirm's biggest revenue line (interest income, about $2.05 billion), Klarna's $261 million in reminder fees, who uses it and why, the debt that stays invisible to credit records, the CFPB rule that was withdrawn in 2025, and three checks from the documents. Facts, not financial advice.

Watch next:
How to Protect Your Money From Inflation (Official Data): https://youtu.be/NCKjORQOTWU

Chapters
0:00 Intro
0:44 How It Works
1:41 Who Pays for Free
3:21 Who Uses It
4:49 The Invisible Debt
5:19 The Rule That Disappeared
5:42 Three Checks

Sources
- Federal Reserve, Economic Well-Being of U.S. Households in 2025 (May 2026): https://www.federalreserve.gov/publications/files/2025-report-economic-well-being-us-households-202605.pdf
- CFPB, Consumer Use of Buy Now, Pay Later and Other Unsecured Debt (Jan 2025): https://files.consumerfinance.gov/f/documents/cfpb_BNPL_Report_2025_01.pdf
- CFPB, The Buy Now, Pay Later Market, Data Spotlight (Dec 2025): https://files.consumerfinance.gov/f/documents/cfpb_bnpl-market-report_2025-12.pdf
- Affirm Holdings, Form 10-K, fiscal year ended June 30, 2026: https://www.sec.gov/Archives/edgar/data/1820953/000162828026059279/afrm-20260630.htm
- Klarna Group plc, Form 20-F for 2025: https://www.sec.gov/Archives/edgar/data/2003292/000200329226000007/klar-20251231.htm
- Federal Register, 89 FR 47068 (May 31, 2024): https://www.federalregister.gov/documents/2024/05/31/2024-11800/truth-in-lending-regulation-z-use-of-digital-user-accounts-to-access-buy-now-pay-later-loans
- Federal Register, 90 FR 20084 (May 12, 2025): https://www.federalregister.gov/documents/2025/05/12/2025-08286/interpretive-rules-policy-statements-and-advisory-opinions-withdrawal

Research and fact-checking: Wealth Filings. Henry is a fictional, illustrated presenter. This video is for information only, not financial advice.

Corrections and context
• Caption correction: at 2:11 the on-screen caption shows "2 oh $5 billion"; the narration says "two point oh five billion dollars" ($2.05 billion).