There’s no question buy now, pay later (BNPL) providers have done an excellent job meeting consumers where they are by providing fast and flexible payment options. So much so, that the BNPL market is forecast to reach $1 trillion in annual value by 2026 and three times that amount by 2030[1].
At Experian, we have long championed the use of expanded data sources, including BNPL information, to empower consumers while enabling lenders to make more informed decisions. However, concerns about the negative impact on consumer credit scores have historically prevented many BNPL providers from reporting account information to credit reporting agencies.
The underreporting of this information has created blind spots for traditional lenders and BNPL providers alike. Traditional lenders are unable to gain a complete view of a consumer’s financial obligations, which limits their ability to accurately assess risk. At the same time, BNPL providers don’t have a view of how or if a consumer has managed BNPL payments with other providers.
Today we’ve made an important step towards overcoming these challenges and supporting responsible lending as Apple becomes the first major BNPL provider to fully furnish “pay-in-4” loan information and payment history directly to Experian.
Experian is committed to driving transparency in the BNPL industry and doing so in a way that does not inadvertently negatively impact consumers. Given this, Apple Pay Later loans borrowed today onward will appear on a consumer’s Experian credit report with a BNPL designation starting March 1. While consumers will be able to see their Apple Pay Later loan information on their Experian credit report, the information will not be factored into existing traditional credit scores but may in the future as new credit scoring models are developed. Consumers in the US can access their Experian credit report for free at Experian.com or through our free mobile app.
As BNPL information is reported to Experian by additional BNPL providers, a consumer’s BNPL history will be visible to lenders who request an Experian credit report – enabling lenders to make more informed decisions when determining whether to extend credit offers.
Transparency around borrowing and repayment behaviors on this rapidly growing set of payment solutions is beneficial for the industry and consumers.
Our commitment to innovation and our relationships with leading BNPL providers have helped us reach this point. This is a critical first step in driving transparency in the BNPL market, but we recognize there is more to be done.
We look forward to working with other leading BNPL providers to drive greater transparency in the BNPL space that will benefit lenders and consumers alike.
1 https://www.lafferty.com/report-store/buy-now-pay-later-market-explodes-worldwide.html