Buy-Now-Pay-Later (BNPL) stocks represent a growing form of commerce. Essentially, BNPL companies allow consumers to pay in chunks, rather than lump sums, for large purchases. By providing installment payments and loans, the idea is that more value can be created from a single transaction than was previously thought. For these companies, it’s been lucrative business.

Consumerfinance.gov describes BNPL: “Buy Now, Pay Later is a form of interest-free credit that allows a consumer to fully purchase a product and repay the loan over four installments, with the first installment typically being a down payment on the purchase. Most Buy Now, Pay Later loans to range from $50 to $1,000 and are subject to late fees if a borrower misses a payment.” The lack of interest differentiates BNPL from credit cards, although both include hefty fees for late payments.

In any case, buy-now-pay-later volume is increasing, as are loan approval rates. That suggests that entrenched companies in the space have substantial opportunities moving forward.

Here are three of the top ways investors can play the growth of the BNPL trend over the long-term.

PayPal (PYPL)

PayPal (NASDAQ:PYPL) is one of the leading pioneers in the world of payments. The company’s legacy PayPal product and Venmo offerings are well-known across the payments space. And like the other two names on this list, PYPL stock currently offers significant upside, which analysts believe could be upwards of 34%.

PayPal’s current BNPL offering allows purchases to be spread across four payments. These are paid bi-weekly and interest-free. Users can utilize the program for purchases between $30 to $1,500. The program is connected with various partner websites, and associated services and goods.

As a company, PayPal is arguably doing well. Revenues continue to grow, and the company anticipates similar growth rates throughout 2023. One of the firm’s core issues is that earnings declined 41% in 2022. That’s a strong negative signal, but earnings did rebound, growing 19% in the fourth quarter. That signals a turnaround for the company, which is a top-of-mind investment in the BNPL space overall.

Block (SQ)

Block (NYSE:SQ) is another fintech stock squarely integrated into the BNPL space. Investors will be happy to know that SQ stock holds 56% upside, based on its average target price.

Block was formerly known as Square before a rebranding was undertaken to align the company with emerging blockchain and crypto opportunities. Square is its flagship product offering eCommerce solutions, but the company also includes Cash App. Block also comprises Spiral and TIDAL, crypto, and music business platforms.

Block began as Square, which accounted for the brunt of its business. That is still the case, but Cash App is quickly taking the lead. In 2022, Square and Cash App accounted for roughly half the company’s total revenues. In Q4, though, Cash App provided $848 million of the firm’s revenues while Square was an even $800 million. The Growth numbers behind each are impressive, although Cash App is growing several times faster. Unfortunately, losses remain large, meaning SQ stock has lagged many of its peers in terms of performance.

Block’s foray into BNPL took place when the company bought Afterpay, a BNPL firm, in early 2022. Block doesn’t record BNPL revenue as a stand-alone item. Instead, the company allocates that revenue evenly between Square and Cash App.

Afterpay contributed $405.7 million of revenue to each subsidiary in 2022 following the acquisition.

Affirm Holdings (AFRM)

If D.A. Davidson analyst Christopher Brendler is correct, Affirm Holdings’ (NASDAQ:AFRM) stock could be worth nearly 200% of its current price. He sees AFRM shares trading at $20 in the future, while analyst consensus price targets suggests a more modest $14 moving forward.

Brendler believes that Affirm Holdings is performing as it should in an environment of tightening credit. By raising prices and tightening lending parameters, Affirm should be able to weather this current macro environment. At the same time, it’s fair to say that Affirm Holdings is the riskiest stock on this list. The company recently posted a wider-than-expected loss, and also boasts the lowest share price of the three companies listed here.

Affirm laid off 19% of its employees in response to recent losses. It should also be noted that rumors of a company collapse are circulating. Again, higher risk is evident with this BNPL play.

But there’s reason to be optimistic as well. A significant growth opportunity exists as only 17% of U.S. consumers used BNPL last year. Affirm’s ability to capture market share in this fast-moving market should provide more upside over the long-term for investors.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.