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The 3 Most Promising BNPL Fintechs to Watch in May 2023

While controversial, the buy now, pay later (BNPL) sector is booming. Currently, a handful of companies dominate the BNPL space. However, new and notable companies are entering the sector, especially in financial technology (fintech), attracted by the prospect of big profits. That has Investors looking into which BNPL fintech stock picks will net them the largest returns.

Some consumer groups and lawmakers criticize the BNPL industry’s business model of providing high-interest loans to consumers that they must repay in equal installments over a set period of time. The critics claim that BNPL traps consumers in a cycle of debt that can be difficult to break. Some buy now, pay later firms have been accused of predatory lending practices and politicians in Washington, D.C. continue to threaten regulatory action against the industry. Despite those issues, BNPL continues to be a popular payment option, particularly among consumers under age 35.

Here are the three most promising BNPL fintech growth stocks to watch in May 2023.

Apple (AAPL)

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U.S. technology giant Apple (NASDAQ:AAPL) has launched a new buy now, pay later service that allows consumers to split purchases into four equal payments spread over a six-week period. Called Apple Pay Later, the new service enables people to track and repay their loans using their digital Apple Wallet. Users can apply for loans from Apple for anywhere from $50 to $1,000 and use those loans for in-app and online purchases. Apple is touting that payments made through its new BNPL service have no interest and no fees.

Apple is also promoting that consumers can apply for a loan within the Apple Wallet app without it impacting their credit score. Additionally, merchants that accept Apple Pay do not need to make any changes to implement the new BNPL service. The move into buy now, pay later comes as Apple moves deeper into banking and online finance. Shortly after its BNPL service was announced, Apple came out with a new high-interest savings account that offers 4.15% interest on deposits. AAPL stock has increased 7% in the last 12 months.

PayPal (PYPL)

Source: Michael Vi /

Fintech giant PayPal (NASDAQ:PYPL) is all-in on BNPL, what they call Pay In 4. The company announced last summer that it is pushing further into buy now, pay later by offering installment loans on bigger purchases. Consumers can now make monthly installment payments on purchases of $199 to $10,000 for up to two years. However, as with most BNPL services, the interest charged by PayPal on these larger loans is not cheap and could be as high as 29.99%. Consumers also need credit approval to secure a bigger loan.

PayPal has been in the BNPL fintech space for going on three years now. It originally followed the path of other companies, offering consumers small loans that they could repay in four equal payments spread over six weeks. But now, the company is branching out with larger loans and repayment periods spread across longer time frames. While some analysts call the strategy risky, PayPal has benefited from BNPL, processing more than 100 million transactions worth more than $15 billion since 2020. PYPL stock is down 20% over the last 12 months.

Affirm Holdings (AFRM)

Source: Piotr Swat /

It’s had a rough ride, but there may now be signs that the stock of BNPL company Affirm Holdings (NASDAQ:AFRM) has bottomed. Year-to-date, AFRM stock is flat with its share price hovering just below $10 since the start of the year. Any movement higher at this point would be welcomed by shareholders following a 70% plunge in the share price over the past 12 months.

Holding AFRM stock back is the fact that the BNPL company behind it remains unprofitable. However, Affirm continues to grow at a fast rate, announcing in February that the number of consumers using its buy now, pay later service rose an incredible 150% year-over-year to 11.2 million people. Revenues generated in its most recent quarter were up 77% from a year ago at $361 million. While Affirm is still operating in the red and remains in start-up mode, its BNPL business shows signs of continued strength.

On the date of publication, Joel Baglole held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.