KBRA releases research examining buy now, pay later (BNPL) asset-backed securities (ABS).

In recent years, BNPL loans have moved from a niche fintech asset class of ABS to a more visible segment of consumer finance. Broadly speaking, BNPL, which is a subset of the broader unsecured consumer lending market, encompasses a variety of products for point-of-sale (POS) financing. As the name suggests, BNPL services provide financing at the time and place of purchase, allowing for payment over time rather than up front. BNPL products range from short-duration and often interest-free pay-in-four loans to longer-term installment loans.

Annual BNPL ABS issuance has increased from less than $1 billion in 2020 to more than $5.5 billion in 2025. However, securitization remains a relatively small portion of the broader BNPL market, with the Federal Reserve estimating approximately $156 billion in originations in 2025 alone. ABS issuance backed by BNPLs existed before the pandemic but accelerated as e-commerce adoption and merchant integration made BNPL a more familiar checkout option. While several large BNPL originators operate in the market, ABS issuance remains concentrated among a limited number of issuers.

This report reviews the current state of the BNPL market, with a focus on securitization trends, key risks and considerations, and credit performance.

Click here to view the report.

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About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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