Point-of-sale lending as a consumer leverage blind spot Report Interpretation

Overview

Goldman Sachs examines the rapid growth of point-of-sale, or buy now pay later, lending as both an incomplete measure of consumer leverage and a developing ABS sector. The report separates favorable current securitization performance from broader warning signs among younger and lower-income borrowers.

Core views

Point-of-sale lending refers to loans offered and approved in real time during checkout, often through fintech platforms using algorithms and alternative data to underwrite customers. The report describes three common structures: loans with neither interest nor late fees, interest-free loans with late fees, and interest-bearing loans. Providers commonly receive a percentage of the sales financed through their platforms. Because many lenders do not report these loans to credit bureaus—arguing that frequent short-term borrowing may be penalized by traditional scoring—the market is difficult to size and may leave consumer leverage less visible. Available indicators nevertheless point to rapid adoption. Klarna expects to finance $156 billion of gross merchandise volume through year-end 2026, while Affirm reported $47 billion of GMV over the previous four quarters. At the household level, a Federal Reserve report estimated that 16% of US adults had used a BNPL loan in 2025, up from 10% in 2021. Goldman Sachs treats these figures as evidence that the product has become material even though comprehensive credit-bureau reporting is limited. The consumer-health evidence is more concerning. Users skew younger and lower income, groups that also show the highest missed-payment rates. Among lower-income borrowers, the leading stated reason for using point-of-sale financing is that it is the only way to afford a purchase; at higher income levels, borrowers more often cite payment smoothing and avoiding interest. Most financed spending remains discretionary, such as clothing, accessories and electronics, but 20% of users report financing groceries or food deliveries and 8% report financing medical or veterinary expenses. The lack of bureau reporting can also facilitate loan stacking: the CFPB estimates that roughly one-third of borrowers have simultaneous loans with different point-of-sale firms. The share of borrowers reporting a missed payment has increased, strengthening the report's concern that these products reveal stress not fully captured in conventional consumer-credit data. For consumer ABS investors, Goldman Sachs draws a distinction between the broad lending trend and the securitized receivables market. It estimates point-of-sale ABS at just over $5 billion, with Affirm receivables comprising the vast majority. Performance has so far been strong, with D90+ rates of around 70bp. New point-of-sale ABS, including AAA-rated tranches, offer wider spreads than similarly rated and structurally similar credit card ABS. On that current-quality and relative-value basis, the report views point-of-sale ABS—especially higher-rated tranches—as an attractive alternative to credit card ABS. That relative ABS opportunity does not offset the report's macro consumer caution. Goldman Sachs views the aggregate point-of-sale signals as another reason to remain wary of lower-income consumer health in the second half of the year, as the support from unusually large tax refunds associated with the One Big Beautiful Bill Act fades. Its economists also expect a challenging cash-flow outlook and low real-income growth for the bottom income quintile, conditions that could make the observed missed payments and affordability-driven borrowing more consequential.

Analysis framework

The report first defines point-of-sale lending and explains why incomplete credit-bureau reporting obscures its scale. It then combines provider GMV disclosures, Federal Reserve and CFPB survey evidence, borrower demographics and payment behavior to assess consumer stress, before separately comparing the size, delinquency performance and spreads of point-of-sale ABS with credit card ABS.

Methodology notes

• Industry AnalysisSupply-demand framework

  Consumer-credit usage and affordability indicators

  The report uses adoption, borrower income profiles, purchase categories, loan stacking and missed payments to assess demand for point-of-sale credit and the financial pressure underlying that demand.

• Fixed Income and CreditSpread analysis

  Relative spread comparison between point-of-sale ABS and credit card ABS

  Goldman Sachs compares wider point-of-sale ABS spreads with structurally similar, similarly rated credit card ABS while considering current D90+ performance, supporting its relative-value conclusion for higher-rated tranches.

Key data

• US adult BNPL usage16% in 2025Up from 10% in 2021, according to a Federal Reserve report.
• Klarna expected GMV financed$156 billion through year-end 2026Provider estimate cited to illustrate sector scale.
• Affirm GMV$47 billion over the last four quartersProvider-reported transaction volume cited by the report.
• Borrowers with simultaneous loans at different firmsRoughly one-thirdCFPB estimate of loan stacking across point-of-sale lenders.
• Food or grocery financing20% of borrowersShare of recent users reporting financing food deliveries or groceries.
• Medical or veterinary expense financing8% of borrowersShare of recent users reporting this use.
• Point-of-sale ABS market sizeJust over $5 billionGoldman Sachs estimate.
• Point-of-sale ABS D90+ rateAround 70bpReported performance level for the sector, dominated by Affirm receivables.

Impact & implications

The report argues that wider spreads and current performance make higher-rated point-of-sale ABS appealing relative to similar credit card ABS. It also interprets the same lending trend as a warning that lower-income consumer strain may be underrepresented in traditional credit data, particularly as tax-refund support fades and real-income growth remains weak.

Risks

• Lower-income borrowers show the highest missed-payment rates, and the share of point-of-sale borrowers reporting a missed payment is increasing.
• Limited reporting to credit bureaus can obscure total leverage and enable borrowers to stack loans across multiple lenders.
• Fading OBBBA tax-refund tailwinds and low projected real-income growth for the bottom income quintile could worsen lower-income consumer cash-flow pressure.