Buy now, pay later once felt like an e-commerce extra: a button beside Visa and PayPal, useful mainly for fashion purchases and younger shoppers. In Europe, that description is outdated.

BNPL has become part of the payments mix. Worldpay’s Global Payments Report 2025 put BNPL at 8% of European e-commerce transaction value in 2024, the highest share globally. ResearchAndMarkets estimated European BNPL payment value at $191.3 billion in 2025, up 12.4%. Forecasts deserve caution, but the direction is clear.

More revealing is what national regulators see. The Dutch Authority for the Financial Markets reported that four providers — Billink, in3, Klarna and Riverty — had around 5.5 million users in the Netherlands in 2024. Amazon, bol and Zalando together had another 4.4 million users of deferred-payment options. That is not niche behaviour.

The appeal is obvious. Consumers can smooth a €300 purchase across several paydays without using revolving credit. Merchants get paid upfront and hope easier checkout lifts conversion and basket size. In an inflation-sensitive Europe, that combination has proved powerful.

A very European competitive map

Klarna remains the name most consumers recognise, but BNPL Europe is unusually fragmented.

PayPal brings wallet distribution and country-specific Pay Later products. Scalapay is visible in Italy, France, Spain and Portugal. Riverty is strong across Germany, the Netherlands and northern Europe. France has two specialists: Alma, active across eight European markets, and FLOA, owned by BNP Paribas. Oney, backed by BPCE and Auchan, serves more than 8.6 million customers across Europe.

Banks are responding too. Santander’s Openbank Pay, previously Zinia, combines pay-later and longer instalment financing and already powers Apple financing in Germany. Consumer-finance groups increasingly look less like reluctant incumbents and more like direct BNPL competitors.

READ MORE: ‘Buy Now Pay Later’ global transaction value reached $120 billion

The UK adds. Clearpay, Afterpay’s British brand, remains established; Zilch has built a card-led model beyond merchant checkouts; and Affirm entered with financing. Zilch’s 2026 acquisition of Lithuania’s Fjord Bank gives it a route to passport credit products across the EU.

B2B is becoming its own category. Billie, Mondu, Hokodo, Two and Kriya apply similar “pay later” logic to business purchasing, where invoices, working-capital pressure and trade credit make the use case arguably more structural than consumer fashion BNPL.

Regulation is changing the product

Europe’s next BNPL phase will be shaped as much by regulators as by checkout design.

The EU’s revised Consumer Credit Directive brings BNPL and smaller credit agreements into a broader consumer-credit framework. Member states had to transpose it by November 2025, with rules applying from 20 November 2026. Affordability assessment, clearer information and stronger consumer protections become much harder to treat as optional extras.

The UK moved earlier. The Financial Conduct Authority began regulating deferred payment credit on 15 July 2026. Providers now face requirements including the Consumer Duty, affordability expectations and access to complaints protections.

This may slow frictionless approvals. That is not necessarily bad. BNPL works best when “easy” describes the payment experience, not the ease with which someone can accumulate five small debts across five apps.

The Dutch AFM offers a warning. It says payment problems are declining proportionally, yet absolute numbers remain high. In 2024, nearly 900,000 customers using deferred payment through Amazon, bol and Zalando incurred late fees. Convenience can become credit stress quietly.

The next growth engine is not another checkout button

The interesting trend now is expansion beyond online retail.

Klarna and Worldline announced in 2026 that Klarna payment methods, including BNPL, would extend into physical point-of-sale environments. Scalapay is also pushing further into stores. FLOA has built a noticeable travel position, where a €1,000 holiday is a more natural instalment purchase than a €25 T-shirt.

That shift matters. Travel, electronics, furniture, healthcare, education and home improvement bring larger baskets and clearer financing logic. They also demand better underwriting. A provider can approve a €70 pair of trainers with limited exposure; financing a €2,000 trip is different.

BNPL, cards and banking are blurring. Klarna has cards and balance products. Zilch wraps instalment credit into a virtual card. Santander and BNP Paribas bring lending and funding infrastructure. Riverty is establishing a bank in Luxembourg. The category is becoming embedded finance rather than a pink button.

Where the model still looks uncomfortable

BNPL is useful, but not universally useful.

For people already juggling overdrafts, cards or several instalment plans, another “interest-free” option can disguise rather than solve a cash-flow problem. Merchants with thin margins also need to scrutinise BNPL fees. Higher conversion matters only when the economics survive refunds, fraud, financing costs and provider fees.

READ MORE: How Digital Wallets Are Transforming Travel Payments

The industry could improve transparency around BNPL exposure. Consumers can hold obligations across multiple providers, while each lender sees part of the picture. Regulation will help, but better data sharing and cross-provider affordability signals may matter more than a reminder notification. The EBA has already identified indebtedness as one of the key issues affecting EU financial consumers.

Alternatives are getting stronger. Bank-issued instalments, card-linked plans, digital wallets, instant account-to-account payments and traditional consumer finance all compete for the same checkout moment. BNPL no longer wins simply because it is new.

Conclusion

Europe has decided that BNPL belongs inside mainstream finance. That is the development.

The likely winners will not offer the most instalments or loudest marketing. Klarna and PayPal have scale. Alma, Scalapay, Riverty, FLOA and Oney have depth. Santander and BNP Paribas bring strength. Zilch is testing a card-led model, while Billie and Mondu show that “pay later” may be more valuable between businesses.

The market is moving toward consolidation of capabilities rather than necessarily brands: credit, payments, cards, fraud tools, loyalty and merchant distribution are being pulled together.

That raises the competitive bar. A European BNPL provider now has to be convenient, regulated, well funded, technically embedded and trusted when something goes wrong. In 2021, checkout speed was enough to stand out. In 2026, it is table stakes.

The next argument will not be whether Europeans adopt BNPL. They have. It will be which companies can make deferred credit useful without making debt invisible.