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https://theconversation.com/research-suggests-those-who-use-buy-now-pay-later-services-end-up-spending-more-246686>
"Once, borrowing money to make a purchase was a relatively tedious process, not
a spur-of-the-moment thing.
True, some stores offered lay-by plans that would let you pay for goods in
instalments. But if they didn’t, and you didn’t already have a credit card,
you’d have to go to a bank and apply for one.
That would mean providing a range of supporting documents, negotiating an
appropriate credit limit, and waiting for approval. It’s unlikely you’d apply
for credit just for a single, small purchase.
In recent years, though, the financial technology or “fintech” revolution in
the customer credit market has changed all that, with the meteoric rise of
buy-now-pay-later (BNPL) services.
BNPL credit allows consumers to split their purchases into smaller,
interest-free instalments. It is often directly integrated into online
checkouts with fast approval, making it easy to purchase something instantly
and spread the cost over coming months.
There are some obvious risks. Many BNPL providers charge less visible fees,
such as late payment fees and account maintenance fees. In many countries, the
BNPL sector is also less regulated than traditional credit.
But does it also change our spending habits? Our recent research uncovered a
concerning insight: consumers who use BNPL services end up spending more money
online than those who don’t. This effect is particularly strong among younger
shoppers and those with lower incomes."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
