Young woman shopping online with credit card and laptop at home

New data from eMarketer reveals that nearly 75 percent of buy now, pay later, or BNPL, users in the U.S. are Generation Z or Millennials. Researchers at the firm also charted the user penetration of BNPL from 2018 to now while projecting the payments solution’s growth to 2025.

Authors of the eMarketer report said over 45 million people above the age of 14 will use BNPL this year, which represents a staggering 81.2 percent gain over the number of users on the platform in 2020.

“Millennials will continue to make up the greatest share of the user base through the end of our forecast in 2025,” the authors of the report said. “Last year, more than 40 percent of BNPL service users were Millennials. That said, Gen Z will eat into this share over the next four years, as this cohort ages into digital shopping.”

In 2018, Generation Z had 1.7 percent penetration of the BNPL user base, which compares to 1.4 percent for Millennials and 0.6 percent for Generation X. By 2025, Generation Z is forecast to have 47.4 percent penetration of the user base compared to Millennials’ 40.6 percent penetration and Generation X’s 30.9 percent. The figures represent the penetration rate of digital buyers in each group, and not the market share of all users.

“A major draw of BNPL services, particularly for younger cohorts, is financial flexibility,” eMarketer said. “These solutions provider younger consumers, whose cash flow tends to be more limited, with great flexibility in payments, especially for larger-ticket items.”

The eMarketer report follows a fierce battle for market share among the top companies offering BNPL such as Klarna, PayPal, Affirm and Afterpay. Last week, Afterpay, for example, expanded its app to include retailers and brands such as Amazon, CVS, Dell, Kroger, Macy’s, Nike, Nordstrom and Walgreen, among others.

The expansion by the BNPL providers is also not limited to Gen Z and Millennials alone. The companies are wooing Gen X and Baby Boomers by touting the same attributes embraced by younger generational cohorts. This includes financial flexibility, low or no interest rate charges and the ability to buy larger-priced items via payment installments.