How is BNPL regulated in the United States?
Mostly through general consumer credit law and state rules. The CFPB withdrew its BNPL interpretive rule in May 2025, and New York has passed its own Buy-Now-Pay-Later Act requiring providers to be licensed. Affirm, Klarna, Afterpay and PayPal Pay Later are the main providers.
In detail
Mostly through general consumer credit law and state rules. Federal oversight has loosened: the CFPB rule that treated BNPL lenders like credit card issuers was withdrawn on May 12, 2025, along with dozens of other guidance documents.
States fill the gap
New York has enacted a Buy-Now-Pay-Later Act that requires providers to be licensed. Affirm says in its 2026 annual report that it is assessing how the law applies to its products. Other states apply their own lending and licensing rules, so the regulatory picture differs from state to state.
A mainstream checkout option
Buy now, pay later sits next to credit cards at US checkouts rather than replacing them.
- Affirm facilitated $50.2 billion of GMV in its fiscal year to June 2026, at about 571,000 active merchants.
- Klarna's US GMV reached $7.9 billion in Q2 2026.
- PayPal's Pay in 4 and Pay Monthly handled more than $40 billion of BNPL volume in 2025.
- Block ties Afterpay to the Cash App Card.
What it means for payment operators
For operators serving US merchants, BNPL is an expected checkout option. Working with providers that hold the licenses required in each state, connecting them as payment methods and activating them per merchant keeps the offer compliant as state rules evolve.