FICO’s BNPL Move May Allow Credit Card Issuers to Gain a Larger Slice of the Payment Pie

FICO recently announced plans to incorporate buy now, pay later (BNPL) data into its new credit scores. The company’s decision to provide a more comprehensive view of a person’s financial activity promotes transparency in lending. 

It may also position credit card issuers to gain new customers and more payment volume from consumers who find their BNPL providers are less enthusiastic about extending credit to them once they learn of their history with the payment tool.

Buy now, pay later services were “a minor part of consumer finance” before the pandemic, according to the Federal Reserve Bank of Richmond. But they’ve since exploded in popularity. 

A recent report projects the BNPL market will grow from $37.1 billion in 2024 to more than $167.5 billion by 2032. But FICO’s decision to include BNPL data in its credit scores could hinder consumer use of the payment method.

By sharing BNPL data with credit bureaus, FICO stands to help the credit scores of people “who have used BNPL and demonstrated good payment behavior,” according to comments Tony DeSanctis, Senior Director of Payments for consulting company Cornerstone Advisors, made to Payments Dive.

“The flip side of that equation, for those abusing BNPL and staying below the radar screen, they are suddenly going to be exposed as credit abusers,” DeSanctis added. 

FICO is the first major credit score provider to incorporate BNPL information into its credit scores, the company said in a press release. But other leading credit score companies may follow FICO’s lead, bringing more clarity to a borrower’s use of lending solutions.

Buy now, pay later products are used by consumers across all age groups. A recent Newsweek report revealed that more than half of Americans use BNPL products. 

Members of Generation Z lead the way when it comes to BNPL usage. Newsweek detailed that 59% of Gen Z members and 58% of millennials use the method of payment. And 65% of members of Generation Z say they plan to use BNPL products more in 2025.

“The rise of BNPL isn’t just about convenience — it’s about control,” Stephanie Harris, CEO and Founder of marketing agency PartnerCentric, told Newsweek. “Americans are using it to navigate life on their terms, whether that means spreading out the cost of groceries or grabbing tickets to a show.”

But use of the payment tool could decrease among the group of shoppers DeSanctis described as “abusing BNPL” once FICO uncovers their history of payment behavior.

Nearly two-thirds of members of Generation Z plan to use BNPL products more in 2025.

Buy now, pay later companies may be less willing to take on customers who’ve missed scheduled payments in the past. And that could open the door for credit card issuers to gain customers who are turned down by BNPL providers.

Consumers who want to maintain a solid credit score — and who were irresponsible in their past use of BNPL products — may turn to credit cards for their payment needs. 

Of course, credit card issuers may not be keen to pick up a slew of new customers who’ve mismanaged their BNPL payments in the past. 

But issuers can provide strategic messaging to people with a history of misusing BNPL products. By educating consumers on how to responsibly use credit cards as their long-term payment solution, issuers can seize the opportunity to gain market share.