You have seen it hundreds of times: a price tag at checkout, then a second, smaller number just below it. Four easy payments. It feels like a deal, even when the math is identical to paying in full.
That feeling is not an accident.
It is a precisely documented psychological mechanism, and new data shows it is reshaping how tens of millions of Americans spend money every single day.
A checkout button that changed spending faster than anyone predicted
Buy now pay later adoption continues to grow rapidly, with 37% of consumers in the United States making a purchase using this method in the past 90 days, a 5-percentage-point increase in just one year, according to the J.D. Power 2026 U.S. Buy Now Pay Later Satisfaction Study.
According to the Federal Reserve Bank of Richmond, BNPL reached an estimated $70 billion in transactions in 2025, growing roughly 20 percent per year since 2021. Separate market projections put annual U.S. BNPL spending in the range of $107 billion to $122 billion for 2025, depending on methodology and scope.
That is not gradual drift. That is a sprint.
As BNPL use matures and providers continue to launch new products, customers are increasingly using it to manage their day-to-day spending.
The shopping carts that got bigger without anyone planning it
Retailers noticed something odd when BNPL showed up at their checkouts. People were not just paying differently. They were buying more.
Researchers find that BNPL drives both an increase in purchase likelihood and 10% larger basket sizes.
Purchase transaction data and a series of experiments demonstrate greater consumer spending with buy now pay later compared to other payment modes.
More installments, or a smaller first installment, further increases BNPL spending.
At the same time, just over 1 in 4 Americans say they have regretted using BNPL after realizing how much they actually owed.
Nearly 60% admit they have used BNPL to finance a purchase they could not otherwise afford.
Something in the checkout design itself was doing the work.
Why splitting a bill feels like spending less money overall
Economists have a long-running theory called the “pain of paying.” When handing over cash feels real and immediate, the brain registers something close to loss. Spending slows.
BNPL leverages biases by fragmenting payments into smaller installments, thereby reducing the perceived “pain of paying” and increasing purchase likelihood.
Reframing total costs into smaller periodic amounts significantly reduces perceived price burden and can reverse preferences, offering a direct mechanism through which BNPL may diminish price sensitivity.
And it is not just that people feel less financial pain.
Their estimate of the actual price shifts, too.
Americans already track their spending more closely as cost-of-living anxiety climbs. BNPL works quietly in the opposite direction.
The numerosity effect: why $150 feels cheaper than $600 even when they are the same
The underlying mechanism has a name, confirmed in peer-reviewed research published in the Journal of Retailing in April 2025.
Researchers Rhys Ashby, Shahin Sharifi, Jun Yao and Lawrence Ang found that presenting an installment amount rather than the full price lowers a consumer’s perception of cost. The explanation centers on the numerosity effect: the brain infers magnitude from the raw number on screen rather than from the total obligation.
To illustrate the mechanism: shoppers shown four payments of $150 alongside a total price of $600 perceive the item as less expensive than shoppers shown only the $600 figure, and are more likely to buy it, even though the two amounts are identical.
The numerosity effect means the brain anchors to the number of dollars visible on screen, not to the total obligation. Four payments of $150 produces a smaller number. The brain reads it as a smaller cost. The purchase goes through.
BNPL access increases both total spending levels and the retail share in total spending, with magnitudes too large for standard economic substitution effects to explain.
These findings hold for consumers with and without inferred liquidity constraints, and are more consistent with a “liquidity flypaper effect” where additional retail liquidity “sticks where it hits.”
The Federal Reserve Bank of Richmond confirmed in a February 2026 brief that BNPL transaction values have grown roughly 20 percent annually since 2021, reaching an estimated $70 billion in 2025, still about 1.1 percent of total U.S. credit card spending.
The finding is striking: even shoppers who had enough money to pay in full spent more when BNPL was offered.
The mechanism did not need financial pressure to work. It needed only the smaller number on the screen.
What knowing the mechanism actually changes for your wallet
The numerosity effect is well-documented, which means it can be seen once you know to look.
Over 25% of Americans report regretting their BNPL use due to unexpected costs, and surveys consistently find that a significant share of BNPL users have missed at least one payment, a figure that multiple trackers put well above 40% in recent polling.
Broader credit data shows that card delinquency rates, while above pre-pandemic levels, have shown some signs of stabilization across income and credit-score groups heading into 2026.
The broader shift toward incorporating BNPL data into mainstream credit reporting reflects growing momentum to integrate BNPL into the traditional credit ecosystem, which could benefit consumers with limited credit histories by allowing positive repayment behavior to contribute to credit scores.
Americans already pay a hidden cost for spending patterns they do not always see clearly. Just as a driver hands over $894 a year in congestion costs without writing a single check, BNPL users accumulate obligations installment by installment, each one feeling smaller than the whole.
The checkout button did not change the price. It changed what the price felt like, and that turned out to be more than enough.
