ABS Market Insights & Consumer Economics: BNPL: Stable With a (Higher) Chance of Meatballs

Research evidence excerpt

ABS Market Insights & Consumer Economics: BNPL: Stable With a (Higher) Chance of Meatballs

Idea

July 15, 2026 05:13 PM GMT

Morgan Stanley & Co. LLCMABS Market Insights & Consumer Economics Carolyn L Campbell

| North America Strategist

Carolyn.Campbell@morganstanley.com +1 212 761-3748

Heather Berger

EconomistBNPL: Stable With a (Higher) Heather.Berger@morganstanley.com +1 212 761-2296

James Egan

StrategistChance of Meatballs James.F.Egan@MorganStanley.com +1 212 761-4715

Katie Solovieva

Penetration of Buy Now Pay Later among survey respondents Data Analyst

Katie.Solovieva@morganstanley.com +1 212 761-6753

held steady over the last 12 months and the average loan Raquel Kanner

balance per user declined – but users are increasingly using StrategistRaquel.Kanner@morganstanley.com +1 212 761-1103

BNPL to buy groceries and other quotidian items. BNPL growth

in the ABS market has slowed and is underpacing the rest of

unsecured lending ABS.

Key Takeaways

Data from both our consumer survey and the ABS market show relatively slower

growth for BNPL than we have seen in years prior. Our survey results tell us that

penetration of BNPL products has slowed amongst consumers, while the average

loan balance declined y/y.

BNPL paper continues to make its way to the ABS market, but growth in that

subsector has been slower this year compared to other unsecured lending

corners: volumes are tracking around 50% of FY25 figures for BNPL but 87% for

non-BNPL MPL ABS.

While usage has not broadened out by count, we are seeing evidence that

consumers are increasingly likely to use these products on everyday products,

like groceries, dining out, and small household items.

BNPL users are more likely to have other consumer debt, too, according to our

survey.