Buy now/pay later loans have exploded during the pandemic as fintechs BNPL introduced a turnkey way for consumers with little or no credit to shop online, creating a phenomenon that continues to have major repercussions.
Some setbacks have arisen for major BNPL fintechs like To affirm and Klarna, which have suffered sharp stock market devaluations in recent months in response to rising inflation, rising interest rates and heightened competition. The Consumer Financial Protection Bureau also recently said it may develop guidelines for rein in BNPL lenders whose practices are mostly unregulated.
But the popularity of buy now/pay later loans is undeniable, as more than half of US consumers have tried a BNPL loan and more than 90% of users say they are satisfied with the concept, according to a survey of 2,200 adults. by Morning Consult on behalf of the Financial Technology Association between September 1-3, 2022.
Other industries – even traditional credit card issuers – have seen how well BNPL loans are resonating with consumers. Many are now trying to adapt the product to their business model, with some tweaks. From charitable donations to pet care, here are the areas where BNPL loans have sparked financial innovation.