38% of Credit Union Members Want BNPL From Their FI

Credit unions have a fresh opening in buy now, pay later (BNPL), and it is less about launching another loan product than helping members make sense of a payment habit that is starting to sprawl.

That is the key takeaway from the March 2026 Credit Union Tracker Series report, “Pay Later’s Next Chapter: Why Credit Unions Are Rethinking Installment Payments.” Installment plans are now embedded in everyday spending, not just big-ticket shopping, and pushing credit unions to rethink where those payments happen and who manages them.

When members use third-party providers at checkout, credit unions lose more than transaction volume.

They also lose visibility into how members are handling cash flow, repayment timing and short-term financial pressure.

The data indicate that bringing Pay Later options in-house could turn a growing source of fragmentation into a stronger, more useful part of the member relationship.

22%: Among top BNPL providers, the total value of installment payments grew 22% in 2025, while transaction volume rose 12%, a sign that Pay Later is becoming a more regular part of everyday commerce.

38%: The share of credit union members who say they would likely use BNPL if their financial institution offered it rose to 38%, up from 32% in 2024. Among Gen Z and younger millennials, interest is far higher at 70% and 71%, respectively.

49%: Nearly half of credit union members say they have already used BNPL from providers outside their financial institutions, with PayPal, Affirm and Klarna standing out as the services they use most often.

What makes the report more interesting is that it is not really about installment lending alone. It is about interface, trust and control. Traditional credit cards give consumers one bill and one cycle to manage. BNPL works differently. Each purchase can come with its own repayment schedule, its own terms and its own provider. That creates a messy experience for frequent users.

The report says one-quarter of BNPL users are usually or always unsure about when their next payment is due or how many payments remain. About half say they run into that problem at least sometimes. This is where credit unions may have an opening. They already have the digital relationship, the account history and, in many cases, the member trust to make repayment tracking easier.

The optimistic angle is that credit unions do not need to invent demand. It is already there. Members are using installment plans for travel, home services, events and even everyday purchases as small as $10 to $30. In other words, Pay Later is moving from occasional financing tool to day-to-day budgeting tool.

If credit unions can place these options inside digital banking channels, they can simplify the experience while giving members a clearer view of spending and obligations in one place. That could also create room for alerts, education and more responsible use.

The report closes with a practical roadmap: Keep BNPL transactions inside the credit union environment, embed installment options directly into digital banking, make members aware those tools exist and build programs around financial wellness.

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