Buy Now, Pay Later services—once confined to fashion, electronics, and e-commerce—are now firmly embedded in the grocery sector.
This dramatic expansion reflects not only rising consumer demand for flexible financial options but also deeper economic stressors such as inflation, stagnant wages, and tightening credit markets. As the cost of food continues to rise, more Americans are turning to installment payments for essentials once purchased with cash or debit.
According to a 2025 LendingTree survey, 25% of BNPL users have financed grocery purchases with these services—up from just 14% in 2024.
Among Gen Z consumers, that number climbs to 33%, underlining a generational shift in how Americans manage daily expenses.
Retailers Race to Integrate BNPL
Walmart made headlines in early 2025 by replacing Affirm with Klarna as its exclusive BNPL provider. The partnership is now deeply integrated into the retailer’s OnePay digital wallet, offering shoppers seamless installment payment options at both checkout and online platforms.
This strategic pivot reflects Walmart’s push to consolidate digital services while aligning with customer preferences for interest-free flexibility.
DoorDash, the largest U.S. food delivery platform, has similarly embraced BNPL by teaming with Klarna to offer installment options at the checkout screen.
This partnership allows customers to “eat now, pay later,” with options to split purchases into four interest-free payments or delay charges to align with payday cycles.
The program is marketed as a financial lifeline during inflationary times, with DoorDash citing it as a response to changing household needs.
Kroger, too, has entered the BNPL market. While not tied to a single provider, it has integrated multiple third-party BNPL platforms at checkout, both in-store and through its digital ordering system.
Analysts suggest Kroger’s strategy is less about branding and more about enabling choice—appealing to a broader swath of price-sensitive shoppers.
The Rise of Third-Party BNPL Providers
BNPL’s surge in grocery retail would not be possible without the expansion of fintech providers aggressively scaling their platforms. Klarna, Affirm, and Afterpay are among the leading players competing for retail partnerships.
Klarna’s dominance in 2025 is notable—not only due to Walmart and DoorDash, but also because of integrations with smaller grocery chains and delivery services.
Affirm, which once held Walmart’s exclusive contract, continues to work with major retailers like Target and Amazon. Although no major grocery-exclusive deals have been announced in 2025, Affirm remains a key BNPL player in general retail.
Afterpay, owned by Block (formerly Square), has focused more heavily on the convenience and local grocery market through partnerships with regional retailers and point-of-sale integration tools.
Its presence is particularly strong in stores where customers are already using Square's hardware—expanding the accessibility of installment financing to small-format grocery operators.
Other upstarts such as Zip, Sezzle, and PayPal’s "Pay in 4" feature are also making inroads, often through white-label BNPL offerings that retailers can embed in proprietary apps. These players are targeting niche demographics, including underbanked and unbanked communities.
The Economic Drivers Behind BNPL's Grocery Push
The popularity of BNPL in the grocery space is largely driven by the squeeze on household budgets.
With food inflation still elevated in early 2025—grocery prices were up 3.7% year-over-year as of April—many consumers are unable to cover basic needs with cash alone. At the same time, traditional credit cards have become harder to obtain or costlier to maintain, with interest rates averaging over 20%.
BNPL offers an appealing alternative: no upfront cost, no interest (if payments are made on time), and no impact on credit scores—at least initially. This ease of access is especially attractive to younger consumers and low-income households, groups that often face barriers in accessing conventional credit lines.
However, experts warn that BNPL’s “no-strings-attached” appeal can mask serious financial risks.
According to the LendingTree survey, 41% of BNPL users reported making at least one late payment—up from 34% the previous year. Missed payments can trigger fees, impact credit scores, or lead to collection actions.
Regulatory Outlook: Caution Meets Innovation
The rapid rise of BNPL—particularly for necessities like food—has attracted scrutiny from regulators. The Consumer Financial Protection Bureau has proposed new rules requiring BNPL providers to adhere to the same disclosure standards as credit card companies.
Among the concerns are lack of transparency in repayment terms, inconsistent dispute resolution policies, and inadequate financial literacy messaging.
International regulators are also taking action. In Australia and the U.K., where BNPL penetration is even higher, agencies have pushed for tighter restrictions on advertising, data collection, and credit checks.
U.S. policymakers are watching closely, particularly as BNPL usage grows in traditionally low-risk retail sectors like groceries and health care.
What’s Next for BNPL and Grocery?
The outlook for BNPL in grocery retail remains bullish. As economic pressures persist and consumer behaviors shift, retailers and fintech firms will likely deepen their partnerships.
Expect to see BNPL integrated more holistically into loyalty programs, digital wallets, and even government benefit systems.
At the same time, education and regulation will play key roles in determining whether BNPL becomes a sustainable tool or a financial trap.
With younger generations increasingly dependent on installment credit for day-to-day living, the challenge ahead lies in balancing innovation with protection.
