Payments/BNPL - What's Driving Merchant Adoption of BNPL?

Research evidence excerpt

Payments/BNPL - What's Driving Merchant Adoption of BNPL?

Payments, Processors, & IT Services

Payments & Processors - Market Overweight

Payments/BNPL - What's Driving Merchant Adoption of June 2, 2026

BNPL?

Takeaways from Channel Checks with BNPL Merchants

The Wolfe Byte

In this note, we examine BNPL merchant adoption trends, consumer demand, and distribution. We also discuss

takeaways from recent channel checks. We expect merchant adoption of BNPL to increase meaningfully and

contribute to strong growth for the industry over the long-term.

●Takeaways from Channel Checks: We conducted channel checks around BNPL usage with 1) an enterprise

general merchandiser (one of the largest global retailers using BNPL), 2) a mid-market footwear retailer, 3)

an enterprise department store, and 4) an enterprise marketplace. In addition to adoption trends, we gained

insights into the competitive landscape. Among many key takeaways, one merchant noted BNPL providers are

not competing as aggressively on price vs. 3-5 years ago, and another merchant noted some BNPL providers

present a merchant with data around the volume they drove via non-integrated offerings in an effort to win direct

integrations. We highlight takeaways below and in more detail on pg. 8-10.

●Robust Merchant Growth: KLAR and AFRM have seen very strong merchant growth in recent periods (see ex.

1-2). KLAR maintains 1,075K merchants (+49% Y/Y) and AFRM maintains 515K active merchants (+44% Y/Y), and

we see merchants adopting more financing programs from these providers. We see significant opportunity ahead,

and both companies have noted further room to penetrate the top merchants in their key markets (see ex. 3-4).

●How do Merchants Assess BNPL Providers/Performance? Our checks suggest merchants consider customer