The Wall Street Journal
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How ‘Buy Now, Pay Later’ Makes Billions From ‘Free’ Loans | WSJ The Economics Of
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August 11, 2025
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8:26Now PlayingBuy now, pay later (BNPL) loans from companies like Affirm, Afterpay and Klarna have exploded as an alternative to credit cards. In January, the CFPB reported that more than two-thirds of BNPL loans went to borrowers with lower credit scores, raising both growing consumer risks and risks for providers. Amid economic uncertainty, BNPL continues to grow with transaction volumes multiplied 20 times since 2019. But how do these companies make money?
WSJ spoke with Affirm and Afterpay to learn about the industry’s growth, its risks and its new opportunities.
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