Recent holiday shopping season data showed U.S. shoppers spent $16.6 billion dollars using BNPL plans, with BNPL volume increasing 14% year-over-year.

One of the major reasons BNPL’s popularity has grown so rapidly is its broad accessibility. Consumers don’t have to pay interest, and some providers don’t even charge late fees for missed payments. The risk checkpoints that have historically acted as barriers for the credit unserved or underserved no longer exist. And without the data and risk technology in place to fill in those gaps, delinquency can and will happen. And it’s happening at a rate of 2.39%, up from 1.83% in 2020, according to a recent report by The Consumer Financial Protection Bureau.

In this Finextra exclusive, Kathy Stares, Executive Vice President, North America for Provenir, outlines the economic factors fueling BNPL usage and what BNPL providers can do to mitigate risk in these highly volatile times.