How BNPL is Reshaping the Travel Industry: The Next Fintech Frontier?

As global travel recovers fully, interest in Buy Now Pay Later (BNPL) services is rising sharply. Traditionally tied to retail, BNPL now extends into the travel sector. Airlines, hotels, and travel platforms increasingly integrate pay-later options at checkout. This shift signals a deeper intersection between fintech innovation and tourism.

Rapid Growth of BNPL in 2025

Analysts expect the global BNPL market to expand reflecting a compound annual growth rate around 48 percent. Adoption of BNPL across sectors beyond retail is a key trend this year, especially in travel, healthcare, and education.

Despite expectations for slower growth ahead, eMarketer still projects BNPL payment volume to rise by approximately 15 percent in 2025.

Why Travel Is a Natural Fit for BNPL

Travel is both emotional and expensive. Consumers often purchase flights and accommodation months before departure. BNPL removes friction at purchase by offering structured payments. For budget-conscious or younger travelers, it offers flexibility and aligns with modern spending habits.

Research suggests Gen Z and Millennials are significantly more likely to use BNPL for travel than older demographics. One study indicates they are nearly 50 percent more likely to choose pay-later options when booking trips.

How Fintech Firms Are Embedding BNPL in Travel

Companies including Uplift, Zip, and Klarna now partner with airlines and online travel agencies to embed pay-later options into booking flows. These integrations eliminate the need for traditional credit at checkout.

Travel-first platforms also enable users to select regional pay-later services at booking. That includes options like GrabPay Later in Southeast Asia or Afterpay and Zip in Australia. Many offer clear terms and no processing fees, aligning with traveler expectations.

Some newer platforms also enable users to select regional pay-later services at booking. One example is Fly Fairly, a travel site that integrates BNPL options like GrabPay Later and Zip, offering transparent pricing and no added payment fees.

Consumer Behavior and Demographics

While BNPL gained traction through retail, travel-oriented usage is shaping a distinct profile. Urban, multicultural families earning under USD 60,000 annually are among the most active BNPL users across purchase types. These households rely on flexible payments to smooth consumption cycles.

Convenience remains a key driver. Users who trust BNPL often spend more readily across platforms, including flights and hotel bookings.

Risk Factors and Regulatory Considerations

The popularity of BNPL is prompting regulatory scrutiny. In the U.S., FICO will begin incorporating BNPL loans into credit scores from fall 2025. That change may affect Gen Z consumers most, as they account for the majority of BNPL use and may carry multiple concurrent plans.

While default rates remain low—typically under 2 percent—they are rising. Late payments increased to roughly 25 percent in recent years. Missed payments now trigger more alerts from traditional lenders and credit bureaus.

Why BNPL Matters to Travel Providers

Integrating BNPL delivers measurable benefits for travel businesses. It boosts conversion, increases average booking value, and helps reduce abandonment. Travel platforms that embed pay-later at checkout blend fintech features with commerce to drive loyalty and satisfaction.

The term embedded finance describes this seamless experience. When BNPL becomes core to the payment flow, customer trust increases. But providers must ensure clear disclosure and support for refunds or cancellations, especially given travel’s complexity.

What Lies Ahead for Travel and BNPL

By embedding flexible payments, travel brands are reshaping expectations. The next wave may include embedded insurance, loyalty financing, real-time payouts, and AI-powered financing tools designed for context-aware booking experiences.

As travel demand grows, payment methods beyond cards and wire transfers will define competitive advantage. BNPL systems that offer transparency, regional options, and responsible lending will win long-term trust.

What This Means for Fintech and Travel

The travel sector’s embrace of BNPL is a turning point for fintech and tourism alike. For travelers, it translates to manageable cash flow and reduced financial friction. For companies, it means higher bookings and stronger engagement. As regulators tighten oversight and fintech products mature, BNPL may evolve into a mainstream payment option for booking flights, lodging, and travel packages.