From BNPL to Regulation, Credit Cards Confronted Threats and Adapted in 2025

Threats both large and small hit the credit card industry in 2025, but the market showed resilience. One threat to the credit card market is Buy Now, Pay Later.

BNPL customers took in an average of 6.3 BNPL loans per lender in 2023 with an average annual dollar amount of $848, according to the Consumer Financial Protection Bureau. 

The global BNPL market is forecast to reach $560.1 billion in 2025, a 13.7% increase year over year, according to Chargeflow. 

But credit cards still dominate the payments market. Credit card spending accounts for more than one-fifth of U.S. gross domestic product, according to the Consumer Bankers Association.

“In many ways, buy now pay later lenders have been one-trick ponies,” said Brian Riley, Co-Head of Payments for Javelin Strategy & Research.

Banks and financial services companies want a deeper relationship with borrowers.

 “I just don’t want your credit account. I want your debit card, I want your deposits. When you go buy a house, I want you to knock on my door,” Riley said. “I want that whole cradle to grave relationship with you. And fintechs can’t really do that.”

BNPL is especially popular with some younger consumers.

“I know there are young people who are using BNPL as their primary form of financing purchases, but I don’t see the transaction volume really taking a very large chunk out of credit cards,” said Jason Steele, Freelance Writer and Founder of CardCon. 

Credit card issuers are offering installment plans on credit cards, and U.S. Bank launched a Split Mastercard with no fees for a three-month payment plan. 

“Certainly I’ve seen Amex, Chase, many major card issuers have some form of splitting payments. And that’s fine,” Steele said. “As long as your payment method is still the credit card, that can be coupled with all sorts of other innovative strategies for making the payment.” 

Industry regulation and unemployment are two threats that could apply pressure on the economics of a card business, explained Doug Villone, Head of US Cards and Partnerships at Barclays.

But these threats are nothing card issuers can’t handle. 

“Things like regulation and economic indicators are things that we’ve been looking at and managing against for decades. And I think we have a really good track record of being able to adjust to those headwinds,” Villone said. 

“So I’ve been in the industry over three and a half decades and ever since I’ve been in the industry there’s the continued march towards consolidation, the continued talk about consolidation,” said Ken Musante, President of Napa Payments and Consulting.

“And first it happened on the issuing side and then it moved to the acquiring side. However, with the continued march to consolidation there has always and continually been these niche opportunities.”

So naysayers about consolidation are overlooking the niche opportunities that arise.

“You can look at our business, the payments business, as being owned by larger and larger companies. But even with that, there’s been continued, and I would argue, growing opportunities within these niches.” Musante said. 

The credit card industry has staying power over threats. 

“I’ve been in credit cards now for almost 30 years and there’s always been threats in the industry. I’ve seen, you know, the financial crisis and Credit CARD Act and lots of different things that potentially created threats to the industry,” said Villone.

“I think what we’ve seen is a very resilient industry over time, one that has been able to adjust to the environment in which it operates.”

One way the card industry exhibits staying power is by monetizing customer relationships.

“Issuers are finding ways to monetize that relationship, grow wallet with that consumer and be able to find ways to generate revenue in a way that works for the bank, works for partners, in our case co-brand partners, and also work well for the consumer because ultimately if the consumer doesn’t see value, they will go elsewhere,” Villone says.

“I have seen threats to the credit card in the past and I’ve seen them fail spectacularly,” Steele said. “Consumers are smart enough to know that their card gives them protections that aren’t available with other forms of payment.”

With credit cards, consumers are protected by the Fair Billing Act, which has been around since the 1970s.

“You have the ability to do a chargeback,” Steele says. “The Fair Credit Billing Act 1974, for the last 51 years, protects us from goods and services not received.”

Visa and Mastercard also have zero liability protection for consumers when it comes to fraudulent purchases on their credit cards.

“Listen, the Visa-Mastercard rules are clear. The zero fraud liability is a hundred percent codified both on the merchant and, and the issuer side,” said Tony DeSanctis, Senior Director at Cornerstone Advisors.

Threats against the credit card industry come and go but the credit card industry has staying power. Seeing the appeal of BNPL for consumers, issuers are now offering installment plans on credit card accounts.

Credit cards also have important consumer protections such as the Fair Credit Billing Act and zero liability that set them apart from other payment options.