BNPL Providers Target Homeowner Cash Flow Gaps as Market Strategy Shifts Beyond Shopping

Research by the JPMorgan Chase Institute has identified how BNPL is becoming part of household budgeting.

The study found that some homeowners use BNPL when they have limited funds available or when their credit cards are maxed out. This is significant because homeowners have traditionally been viewed as more financially secure and, thus, stable borrowers.

This behavior identifies that BNPL is helping households cover cash flow shortages rather than simply providing financing for purchases.

The Chase report says BNPL has moved beyond checkout convenience and is now used to smooth expenses and manage tight budgets, as well as bridge financial gaps.

It appears that when a short-term loan product begins to support regular expenses, it no longer acts as a discount for purchasing, but rather serves as a pressure relief valve for managing cash.

Homeowners are increasingly turning to BNPL “more as a liquidity valve than a convenience tool,” according to Makada Henry-Nickie, Research Director at the JPMorgan Chase Institute.

BNPL is also becoming increasingly popular in the overall marketplace.

More customers are using BNPL, and most indicate a greater level of satisfaction with the process. That said, the increasing popularity of BNPL creates challenges for lenders and credit analysts in determining an accurate picture of a customer’s household financial health.

Consumers say they like BNPL. But the way they use it tells a different story.

BNPL Use Rises as Households Feel Cash Pressure

Findings by the JPMorgan Chase Institute indicate that BNPL use increases when consumers have limited discretionary funds to allocate toward non-essential expenditures.

In this regard, consumers may choose to use installment payment options to fill in the gaps they face when their available funds fall short of meeting their ongoing essential expenses.

Research Director at the JPMorgan Chase Institute, Makada Henry-Nickie, said homeowners are using BNPL “more as a liquidity valve than a convenience tool.” This implies that the manner in which BNPL is being used has changed.

BNPL was previously found to be primarily used at point of sale for discretionary purchases. But BNPL is now being used as part of a consumer’s regular spending.

Once used at points of sale for discretionary purchases, BNPL is now becoming part of a consumer’s regular spending.

Consumers are also using BNPL to help them manage routine monthly expenses and irregular income cycles (i.e. to ensure timely payments on fixed expenses), as well as to cover temporary budget shortfalls that could have otherwise been addressed by using a credit card or tapping into personal savings.

The change in the way BNPL is being used impacts lenders, as it will closely mirror a consumer’s day-to-day cash flow and financial stresses. In the past, BNPL was used for making infrequent, discretionary retail purchases.

Consumers Like BNPL More Than Ever — And Use It More Often

U.S. consumer response to BNPL is positive, despite the growing number of users.

The 2026 J.D. Power U.S. Buy Now, Pay Later Satisfaction Study shows that 37% of U.S. consumers used BNPL within the last 90 days. That is an increase of 5 percentage points compared with last year’s study.

BNPL satisfaction has increased, particularly for bank-backed BNPL products. This reflects the sustained and rapid growth of BNPL. 

In addition to using BNPL for retail purchases, many consumers are now using it as a budget management tool and to help smooth out their cash flows. 

The use of BNPL is increasingly occurring in conjunction with other forms of credit rather than instead of them.

Consumers now use BNPL to help smooth out their cash flow.

Federal Reserve research indicates that many BNPL customers are carrying additional types of debt and many indicate a need to use installment payments. In fact, a number of consumers have indicated that BNPL was the only option available to them for making a purchase.

Rather than eliminating the use of credit cards, BNPL may add to existing financial obligations. A large number of smaller installment payment agreements can create increased pressure (leverage) which is difficult to follow.

Why Lenders May Be Missing a Growing Risk Signal

The problem for lenders is visibility. Because much of the BNPL obligation does not show up in the traditional credit report, borrowers can appear to be underleveraged, when in fact they are using multiple forms of borrowing. 

Experian has identified this lack of visibility as an expanding blind spot in credit reporting. 

This blind spot could become a greater problem as BNPL moves from a one-time purchase to everyday purchases. 

“(Lenders) may be extending credit to borrowers who are far more leveraged than (their) models suggest.” — Erica Sandberg, BadCredit.org columnist

Credit analysts and providers have flagged the trend as a significant risk because it is possible that consumers will take advantage of BNPL in conjunction with other forms of debt. As consumer finance expert Erica Sandberg noted, “You may be extending credit to borrowers who are far more leveraged than your models suggest.”

As fintech analyst Alex Johnson wrote, “For BNPL, the challenge is keeping track of payments (especially when using multiple providers). Overdraft and BNPL pay-in-4 can both be difficult to manage, but in different ways.”

He points to tracking and fragmentation across providers as a core risk for both consumers and lenders. Currently, some of the providers are starting to provide their BNPL data to credit bureaus; but, the number of providers doing so varies greatly.

What was once a convenient checkout option has become a component of household cash flow and, as such, is part of the consumer’s debt, which is not reflected in traditional risk models.