The emergence of buy-now-pay-later (BNPL) services has revolutionized the way consumers approach spending, making it easier to make purchases without immediate payment. This trend allows shoppers to split their payments into smaller, interest-free installments, often directly integrated into online checkouts for quick approval. While BNPL offers convenience, research indicates that it may lead to increased spending, particularly among younger consumers and those with lower incomes. Data from a Nordic retailer revealed that BNPL users spent an average of 6.42% more than those who opted for traditional payment methods, especially on low-ticket items. This phenomenon can be attributed to psychological factors like hyperbolic discounting, where immediate gratification is prioritized over future costs. As BNPL services gain traction globally, projected to exceed 670 million users by 2028, consumers must navigate the potential risks, including hidden fees and the temptation to overspend, treating BNPL with the same caution as traditional credit options.
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