We’ve been tracking the evolution of the Buy Now, Pay Later (BNPL) market since early 2019 — well before it became a buzzword in mainstream consumer finance. From the beginning, it was clear that BNPL had the potential to fundamentally reshape how people approach purchasing and credit. Since then, the growth has been staggering. In the United States alone, BNPL transaction volume surged past $70 billion in 2023, more than doubling from just $33 billion in 2020, according to the Consumer Financial Protection Bureau. In Canada, the adoption rate grew by 30% year-over-year between 2022 and
2023, with over 8 million Canadians having used a BNPL service, according to TransUnion Canada.
Much of this explosive growth can be attributed to companies like Affirm, Afterpay (now part of Block, Inc.), Klarna, PayBright (acquired by Affirm), and Sezzle, which made installment payments simple, fast, and frictionless for consumers. What started as a niche product for discretionary spending has now expanded into essentials like groceries, utilities, and healthcare bills. BNPL has become a flexible tool for managing cash flow — especially in times when rising costs stretch every dollar thinner.
However, as the market grew, so did the warning signs. Our analysis of BNPL portfolios over the past few years has revealed real challenges beneath the surface. Nearly 50% of BNPL users in the U.S. reported missing at least one payment in 2023. In Canada, one in three BNPL users now juggles multiple loans across different providers, often without a clear sense of their cumulative obligations. Rising delinquency rates, frequent loan workouts, and growing consumer overextension suggest that, without guardrails, BNPL can quickly turn from a convenience into a financial burden.
At Avon River Ventures, we see BNPL as neither inherently good nor inherently bad — it’s all about how it is structured, how it is marketed, and how it is managed. Our Lender Finance platform is designed to support BNPL companies that share this belief. We don’t just fund transaction volume. We fund thoughtful growth — growth that is built on smart underwriting, transparent consumer education, and a genuine commitment to long-term financial wellness.
When evaluating BNPL companies for funding, we focus on the fundamentals that will set winners apart in the next phase of the market. We look for companies that maintain delinquency rates consistently under 5%, that have real-time systems to monitor loan stacking across providers, and that proactively educate consumers about budgeting and repayment. We favor platforms that use risk-based pricing — rewarding consumers who demonstrate strong repayment behavior — and that have built-in compliance capabilities to meet regulatory standards set by bodies like the CFPB in the U.S. and OSFI in Canada.
Ultimately, we believe that responsible BNPL can and should be a force for good. It can offer consumers flexible access to credit without trapping them in cycles of debt. It can empower people to smooth out financial volatility rather than deepen it. And it can build lasting value — not just for consumers and merchants, but also for the BNPL companies themselves and their capital partners.
At Avon River Ventures, we’re proud to back the innovators who are getting it right.
If you’re building a BNPL platform with sustainability, responsibility, and consumer health at its core, we’d love to connect.
Let’s build a future where credit innovation truly strengthens financial lives — not just balances the books.