The 2025 holiday season is shaping up to be one of cautious celebration. With persistent inflation, tighter household budgets and higher interest rates, consumers are once again looking for smarter, more flexible financing options to manage their spending.
For banks, lenders and retailers, that means one thing: holiday consumer financing is back in the spotlight.
According to a 2025 Bankrate survey, 41% of shoppers are stressed that the cost of holiday gifts will be higher this year.
Tariff concerns are likely a prominent reason why more than 2 in 5 holiday shoppers fear higher prices this year.
Ted Rossman, Bankrate senior industry analyst
The Continued Rise of BNPL over the Holidays
BNPL isn’t just a pandemic-era phenomenon anymore. It’s now an embedded part of the retail experience.
- BNPL transaction volume in the U.S. is projected to surpass $95 billion in 2025, up from $75.6 billion in 2022. (Insider Intelligence)
- 57% of Millennials and 52% of Gen Z plan to use BNPL to pay for gifts this season. (PYMNTS)
- Holiday sales financed through BNPL grew 24% year-over-year in 2024, with merchants reporting a 17% increase in average order value. (Adobe Analytics)
The appeal is simple: financing helps consumers spread out gift costs, while allowing merchants to maintain sales momentum in a cost-conscious economy.
5 Reasons to Offer Consumer Financing over the 2025 Holiday Season
- Reach new customers through embedded lending channels
- Onboard new merchant partners before peak shopping begins
- Grow consumer financing revenue through high-volume seasonal activity
- Stay relevant in the fast-evolving retail finance ecosystem
- Compete effectively with fintech BNPL providers
5 Ways to Capture Your Slice of the Consumer Financing Holiday Market in 2025
The opportunity is massive – but only for those ready to meet the demand.
1. Offer tailored financing options
Provide consumers with a range of flexible, personalized financing options to match their purchase, credit profile and needs, including:
- Split-pay (pay-in-4 or pay-in-3)
- Installment loans
- Lines of credit
This ensures accessibility for every budget and ticket size.
2. Go omnichannel
Consumers expect the same financing experience across online, in-app, telephonic and in-store checkout. Unified embedded lending APIs or virtual cards can make this seamless.
3. Don’t forget B2B
Small and medium-sized businesses also need financing to stock up for holiday demand. Offering embedded B2B financing can help merchants capture additional seasonal sales.
4. Act fast if you haven’t launched your embedded lending solution yet
It’s not too late. Choose solutions that can go live within weeks:
- Virtual card programs
- E-commerce plugins or SDKs for quick online deployment
Responsible Spending and Lending During the Holidays in 2025
As holiday spending rises, many consumers look to flexible payment options – but not all options are built the same. While traditional BNPL models have offered speed and convenience, they often lack long-term transparency and oversight. Banks have a unique opportunity to provide a responsible alternative.
Yaacov Martin, CEO of Jifiti, has emphasized that consumers increasingly prefer “bank-financed point-of-sale (POS) options”.
When a shopper knows their financing option is offered by a regulated financial institution, they’re more likely to treat it as part of a sustainable budget rather than a short-term impulse. For banks and merchants alike, promoting responsible spending builds customer trust, lowers friction at checkout and strengthens loyalty for the next season.
The Bottom Line
This holiday season, consumer financing isn’t just a payment option – it’s an expectation.
Banks and lenders that enable flexible, responsible financing will capture both short-term revenues over the 2025 holidays and long-term customer relationships.
Disclaimer: The information in this article is for informational purposes only, and should not be construed or relied upon as legal advice on any subject matter. The author is not responsible for any consequences whatsoever arising from the use of such information.
