PayZen, which has about 50 employees, is extending the buy now-pay later trend into healthcare as fintechs aim to capitalize on the hot payments tool in areas beyond the retail arena. While PayZen services allow consumers to spread their healthcare payments over time, other BNPL providers are doing the same for legal and auto expenses. 

In light of rising healthcare costs and limited government support, some Americans face staggering medical bills. One-fourth of American adults who responded to a survey by the healthcare advocacy group Affordable Health Insurance said they have $10,000 or more in medical debt, and nearly half (44%) of the 1,250 respondents said emergency room visits contributed to their medical debt.

“Healthcare equity and affordability is a foundational problem in the U.S.,” PayZen CEO and co-founder Itzik Cohen said in the release. “Too many Americans have delayed or foregone getting the care they need because they aren’t offered an affordable way to pay. At PayZen, we’re determined to help fix this broken system.”

Other BNPL providers are growing too, and adding more services. For instance, Block BNPL provider Afterpay last month introduced a monthly installment payment option for purchases priced between $400 and $4,000. 

But competition is growing too. U.S. BNPL competitor Affirm surpassed Swedish rival Klarna in terms of third-quarter app downloads by U.S. consumers, according to a Bank of America analysis.

Even as BNPL providers enter other industries, its pioneers are being forced to scale back in the face of worldwide economic headwinds and regulatory scrutiny.

In a shareholder letter this month, Affirm disclosed to investors that it planned to cut back its hiring plans for fiscal year 2023, a move it made to reduce costs. Klarna took a similar step in September when it offered buyouts to staffers, after cutting about 700 workers in May. 

Buy now-pay later startups aren’t alone in reducing their employee headcount. Digital payments company Stripe also announced plans to lay off 1,140 staffers this month, with CEO Patrick Collison saying the company grew too quickly amid the e-commerce boom during the COVID-19 pandemic and didn’t anticipate an economic downturn. 

Last month, the Federal Trade Commission warned buy now-pay later providers, retailers, marketers and bill collectors that the agency’s consumer protection regulations apply to installment payment arrangements. The agency cautioned those companies to avoid deceptive and unfair practices when engaging with consumers.

PayZen’s capital infusion comes as investors drive less money into payments startups. Payments startups raised $7.59 billion in the second quarter, down 18.7% from the previous quarter, according to an analysis from research firm Pitchbook. Point-of-sale startups brought in the most capital, followed by payroll, accounts receivable and accounts payable companies; and business-to-business payments startups, the Pitchbook data showed.