Buy now, pay later (BNPL) services have surged in popularity, transforming into a $36 billion industry as Americans increasingly opt for flexible payment options. Initially celebrated for allowing consumers to make interest-free purchases, BNPL providers like Klarna, Affirm, and Afterpay are diversifying their offerings. They now provide interest-bearing loans and services that resemble traditional banking products, such as debit cards and savings accounts. This shift comes as user growth slows, prompting companies to explore new revenue streams through app-based services that connect users with merchants and payment plans. However, consumer advocates caution that while BNPL can be appealing, it may come with hidden costs, including late fees and potential impacts on credit scores. As these companies expand their financial services, consumers should remain vigilant and informed about the terms and implications of using BNPL, ensuring they understand the risks associated with these evolving financial tools.
Read the full article here.