Washington steps back on BNPL, so Brussels now sets the underwriting floor

The Consumer Financial Protection Bureau reversed course on its 2024 rule that would have treated buy now/pay later products like credit cards, leaving individual states to step into the gap ^[1], and the Trump administration has taken a light approach to supervising the sector ^[2]. In the same window, the European Union's second Consumer Credit Directive pulls BNPL into consumer credit law with mandatory affordability checks and strict disclosure requirements, with full compliance required by November ^[3].

That divergence matters less than it looks, because a compliance build does not stop at a border. American Banker reports that US-based players including Amazon and PayPal are appearing to a greater extent in foreign markets ^[4], and the UK has also tightened its BNPL consumer protections ^[5]. Nick Maynard of Juniper Research told American Banker the market "is only going to get more competitive and you'll see bigger brands get increasingly involved" ^[6]. Bigger brands are precisely the firms with multi-market exposure and the least appetite for maintaining two underwriting standards.

The forecasts explain why no one is walking away from Europe to preserve a looser US model. Juniper's 2024 study projected BNPL users would grow 107% by 2028 from 380 million in 2024 ^[7], which works out to roughly 787 million ^[8]. Juniper expects US digital BNPL transaction value to grow 77.1% between 2026 and 2031, and European value 71.5% over the same period ^[9] - a gap of 5.6 percentage points ^[10]. That is not a spread that justifies treating the EU as a side market with its own rulebook.

Ticket size pushes the same direction, independent of any regulator. The CFPB reported in December 2025 that the average BNPL transaction was $135 in 2023, the most recent year available ^[11]. Brian Riley of Javelin Strategy & Research told American Banker that "as you start scaling up, you need to invoke good credit judgment on the account" ^[12]. Larger baskets turn a convenience product into a credit book.

Banks are the quiet beneficiaries. Robert Kilpatrick of Datos Insights said fintech BNPL providers historically held an edge over banks because they were not required to run stringent creditworthiness checks, and that the new rules will force all providers to operate more in line with how banks traditionally do ^[13]. Required transparency on late fees also helps level the field, he added ^[14]. His colleague Daniel Dawson said nonbank players could lose some of those advantages under the new European and UK regimes ^[15]. EY's John Radecki made the parallel point about scale: if a national US regulator did step in, it "could benefit some operators, potentially those that are larger scale and have the ability to act at scale" ^[16]. Read that as incumbents with existing credit infrastructure.

Watch the November EU deadline, and then watch whether US-facing underwriting quietly converges on the European standard rather than staying looser at home. Radecki said the European and UK experience will be "very instructive" to US operators ^[17], and flagged a possible shift after Trump leaves office, either through legislation or a next administration that places higher priority on BNPL consumer protection ^[18]. In the meantime, state rulemaking is where American supervision actually sits ^[1], which means the practical floor for a cross-border provider is set in Brussels and London, not Washington.