Buy Now, Pay Later

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.title[
# Buy Now, Pay Later
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.author[
### Nam Nguyen
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# What is BNPL?

BNPL is a payment method that lets you split a purchase into multiple interest-free installments — usually four.

For example, you buy a $100 pair of shoes, and instead of paying it all upfront, you pay $25 every two weeks.

While credit cards can incur interest rates of 20%, most BNPL aplications are interest-free with small amount of late payment fees.

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# State of BNPL market

Since there are no interest rates, BNPL has become a popular payment method for consumers since it inception in 2017. Especially during the pandemic, when people were more likely to shop online, BNPL has become a popular payment method for consumers.

Global BNPL transactions value is predicted to reach 580 billion USD in 2030.

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# Merchant

BNPL because it helps consumers overcome the final barrier to purchase — the checkout.

It makes expensive items feel affordable, and that means people are more likely to click 'buy'

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# BNPL Provider

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    - **Merchant fee:** 
      - 2-7% of all purchases using BNPL
  - **Late payment fee:**
    - $8 to $15 per missed installment
  - **Collect purchasing data**
  - **Selling loans to financial institution**
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# Customer

**Benefit:** interest free payment, earn money while paying off debt
**Disadvantage:** required finance education

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## Bad Spending Habit: Loan Stacking

Take out multiple loans at once across different platforms, which can quickly spiral into unmanageable debt

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# Prey the vulnerable

Looking at the graph, the majority of BNPL consumers are people with no or low credit score.

Furthermore, these groups of consumers have high default rates, which means they are more likely to miss payments and incur late fees.

These could easily lead to a cycle of debt, as they may take out more loans to pay off existing ones.

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# Closing thoughts

-- ## Don’t use money more than what you have
-- ## Study finance

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# Reference

Statista (2025), Global transaction value of buy now, pay later (BNPL) in e-commerce from 2021 to 2024, with a forecast for 2030. Available at: https://www-statista-com.ap1.proxy.openathens.net/statistics/1311122/global-bnpl-market-value-forecast/

Statista (2025), Biggest buy now, pay later (BNPL) apps in the United States from 1st quarter of 2015 to 1st quarter of 2025, by number of downloads. Available at: https://www-statista-com.ap1.proxy.openathens.net/statistics/1310163/bnpl-most-popular-apps-in-usa/

Statista (2025), Monthly unique visitors of e-commerce sites with and without Buy Now, Pay Later (BNPL) options in 2022, by average order value range. Available at: https://www-statista-com.ap1.proxy.openathens.net/statistics/1429470/bnpl-impact-on-e-commerce-traffic/

Shupe, C. and DeLuca, J. (2025). Consumer Use of Buy of Buy Now, Pay Later and Other Unsecured Debt. Available at: https://doi.org/10.2139/ssrn.5098901.

Yakoboski, P.J., Lusardi, A. and Hasler, A. (2024). Financial literacy and well-being in a five generation America: The 2021 TIAA Institute-GFLEC Personal Finance Index. Available at: https://doi.org/10.2139/ssrn.4256797.

Newyorkfed.org. (2025). Household Debt and Credit Report. Available at: https://www.newyorkfed.org/microeconomics/hhdc