Who Uses BNPL—and Why
Pay-in-four BNPL users are not one financial type. This chapter examines who reported using the product in 2025, how savings capacity relates to use, and why convenience can remain a real motive even when a household has little room for error. The practical value of the evidence is not to label a particular borrower; it is to show why the same repayment schedule can carry different levels of exposure for different people.
The user pattern is broader than a story about desperation
The Federal Reserve's analysis draws its main user findings from the 2025 Survey of Household Economics and Decisionmaking, or SHED. The survey is described as nationally representative and included nearly 13,000 respondents. Sixteen percent of all adults reported using BNPL in 2025. That denominator matters: the figure describes adults, not the number of BNPL loans, the share of online purchases, or the percentage of users who later missed a payment.
Use had increased steadily each year since the SHED first asked about BNPL in 2021. The product was therefore becoming more common across the adult population, but adoption was not evenly distributed. Usage was higher among younger adults, adults without a bachelor's degree, and Black and Hispanic adults. Women were consistently more likely than men to use BNPL; in 2025, nearly one in five women reported using it in the prior year. The analysis says the difference between women and men remained after accounting for differences in income, educational attainment, and age.
These comparisons are useful because they show where adoption is concentrated. They are not explanations of why every group has the pattern it does. The survey results do not establish that age, education, race, or gender causes someone to choose BNPL. Nor do they turn membership in a group into a prediction about an individual's account balance or repayment behavior. A population comparison identifies a relationship in the data; it does not supply the mechanism behind that relationship by itself.
The financial-resource pattern is more directly connected to the question of resilience. Earlier research using the SHED found higher BNPL use among people with lower incomes, lower credit scores, debt-repayment struggles, or revolving credit-card balances. The 2025 results preserved the broader pattern: adults with fewer financial resources were more likely to use BNPL. This is not the same as saying that BNPL is used only when other options have failed. It means the payment tool is present in the financial lives of people whose budgets may have less spare capacity.
That distinction matters because a payment product can serve two functions at once. It can make a purchase easier to schedule, and it can help a household bridge a gap between the purchase date and the next several weeks. The first function is about preference and convenience. The second is about liquidity—how much readily available money remains after current obligations. A user can value the first function while needing the second.
Savings capacity exposes uneven room for error
Income is an important financial measure, but it does not tell us exactly how much cash a household can use today. A person with a higher income may have little savings available after existing commitments. Another person with a lower income may have a temporary reserve. To get closer to the timing problem at the center of BNPL, the SHED asks about the largest emergency expense an adult could cover right now using only savings.
This is a practical proxy for cash-buffer resilience. It does not measure total wealth or give a complete account of income, debt, or bank balances. It asks a narrower question: if a problem arrived today, how large an expense could the person meet without drawing on future income or another source of credit? That question is relevant to BNPL because the product creates scheduled claims on money that will be available later.
The difference in reported BNPL use across the measure is substantial. Thirty-one percent of adults who could cover less than $100 using only their savings used BNPL in 2025. The share decreased as savings capacity rose, reaching 8 percent among adults who could cover an emergency expense of $2,000 or more. The comparison is between two ends of a self-reported savings-capacity measure, and the article describes a steady decrease across the range rather than a single threshold at which a person becomes a BNPL user.
The gradient should be read as evidence of uneven exposure, not as a rule about individuals. It does not mean that every adult with less than $100 in savings uses BNPL, or that someone able to cover $2,000 cannot experience repayment difficulty. It means that, in this national survey, BNPL use was more common among adults with a smaller immediate reserve. The measure helps explain why a shared four-payment design may feel ordinary to one user and precarious to another.
A simple hypothetical makes the logic concrete. Suppose two people choose the same pay-in-four plan and each must make the next installment in two weeks. One has savings that can absorb a modest surprise; the other can cover almost none without delaying another payment. Both may honestly say that spreading payments is convenient. The difference is not necessarily their attitude toward BNPL or the purchase. It is the amount of slack around the scheduled debit. The survey cannot tell us which bill will arrive or what either person will do, but the savings-capacity gradient shows why those surrounding conditions matter.
The same pattern also helps interpret the product's growth among people facing credit and liquidity constraints. A small initial payment may make immediate access possible when paying the full amount would require waiting. But the six-week schedule does not create new income. It moves part of the claim into the future. For someone with a thin buffer, that can be useful if income arrives as expected and difficult if even a modest disruption consumes the room set aside for the next installment.
The wording of the measure is important here. “Largest emergency expense an individual could handle right now using only savings” is not a synonym for poverty, low income, or inability to pay debts. It is a particular measure of liquid savings capacity. Keeping that distinction prevents the analysis from turning a useful indicator into a broad judgment about a person's financial character.
The denominators also change as the question changes. The 31 percent and 8 percent figures describe BNPL use among adults at two points on the savings-capacity measure. They are not the share of BNPL users who had a particular amount saved. The later 87 percent and 82 percent figures, by contrast, describe reasons reported by people who used BNPL. Treating all four percentages as if they came from the same group would make the pattern look more precise than it is.
The savings measure is valuable because it brings the product's timing problem into view, but it cannot tell us the direction of every relationship. A limited reserve may make installment payments attractive; repeated financial pressure may also make it harder to build a reserve. The survey comparison does not settle those possibilities. It shows that BNPL use and limited emergency savings appeared together more often in the 2025 population. That is enough to identify a concentration of exposure, not enough to assign a single cause.
The result is a more careful user model. Demographic and financial-resource patterns tell us where use is more common. Savings capacity tells us why the ability to absorb a new debit is relevant. Neither supplies a complete portrait of a borrower. A person is not reducible to a survey category, and the survey does not reveal every upcoming bill, account balance, or other obligation. The evidence becomes more useful when it is treated as a map of relationships rather than a ranking of responsible and irresponsible users.
The two routes into BNPL can be held together without collapsing them:
The diagram should not be read as a decision tree in which low savings mechanically produces BNPL use. It puts two kinds of evidence beside one another: what adults reported doing at different levels of savings capacity, and what users said they valued. The connection is interpretive. A thin cash buffer can make payment spreading more consequential, but the survey does not say that every user with a thin buffer chose BNPL for that reason.
Preference and constraint can coexist
The reasons users give for BNPL reinforce the need for a more nuanced interpretation. In 2025, the two leading reasons were wanting to spread out payments, reported by 87 percent of BNPL users, and convenience, reported by 82 percent. Respondents could select multiple reasons. The option that BNPL was the only accepted payment method they had was the least common among the choices.
These responses contradict a simple assumption that BNPL users are generally making a last-resort choice. Many users select the product because its particular arrangement is appealing. Four payments may be easier to organize than one full payment. A retailer or app may make the option easy to access. The product may feel useful for a purchase whose total cost is known but whose timing is inconvenient.
But a preference-based answer does not erase a financial constraint. Someone with little savings can prefer a payment schedule precisely because it spreads a large immediate claim into smaller ones. Someone with a substantial reserve can also prefer the same schedule for convenience. The stated reason identifies what the user values about the product; it does not reveal the full set of pressures around the user's account.
This is why “necessity” and “convenience” should not be treated as opposite ends of a single scale. The SHED question allows multiple reasons, so the 87 percent and 82 percent figures are not competing shares that must add to 100 percent. They describe overlapping reports from users. A person may use BNPL because they want to spread payments, find it convenient, and have limited alternatives for managing the timing of a purchase.
The consistency of the reason ranking over time strengthens the conclusion that these features are central to the product's appeal. It does not answer a different question: whether users understand the possible costs of a later failed debit, or whether the convenience remains worthwhile after a fee. The survey captures reported reasons for use, not a complete before-and-after account of the decision.
The distinction between observed pattern and inferred explanation should stay visible throughout. The survey can show that BNPL use is more prevalent among certain groups and more common at lower levels of emergency savings capacity. It can show what users say they value. It cannot, from those comparisons alone, identify the institutional, cultural, or individual reasons behind every demographic difference. It cannot establish that a particular user chose BNPL because of a specific financial constraint, or that using it caused a later shortage.
What the evidence does establish is a useful starting point for judging exposure. Adoption is broad, but it is more common among adults with smaller financial buffers. Users often describe a positive feature of the product, but that feature can be especially attractive when a household is trying to manage tight timing. In other words, convenience is not discredited by constraint; it is made more consequential by it.
The next layer is the purchase itself. BNPL is used for clothing and electronics, but also for groceries, food delivery, travel, and medical or veterinary procedures. Those purposes do not determine what will happen to a payment, yet they reveal the different household situations into which the same four-installment design is inserted.