Interest in “Buy Now Pay Later” Transactions Worldwide Falls by 46% In the Last 5 Months
Buy now, pay later (BNPL) is an alternative to credit card payments that has recently become popular. This type of payment allows shoppers to make purchases and then pay for them over time, usually in interest-free installments. However, according to an analysis by MoneyTransfers.com, the global interest in this payment method has fallen by 46% in five months.
MoneyTransfers CEO, Jonathan Merry commented on the data saying,
The data suggests that the allure of buy now, pay later may be wearing off as consumers become more aware of the potential risks associated with this type of debt. With no interest to pay, it can be easy to fall into the trap of overspending and then struggling to make the repayments. This is especially true given the current economic climate where many people are already facing financial difficulties.”MoneyTransfers CEO, Jonathan Merry
Drawbacks to BNPL
Some of the providers of BNPL services include Affirm, Afterpay, Zip (formerly known as Quadpay), PayPal’s ‘Pay in 4’, and Sezzle. More and more customers are turning to these types of services to pay for all sorts of things, from clothes and vacations to workout gear.
BNPL can be an attractive proposition for shoppers as it can help them to spread the cost of big-ticket items and make purchases that they may not have been able to afford otherwise. However, there are some drawbacks that consumers need to be aware of before signing up for a BNPL service.
However, there are some drawbacks to using this type of payment method.
For one, it can be easy to overspend when you’re not paying attention to the total cost of your purchase. Additionally, if you miss a payment or are late on a payment, you may be charged a fee. And finally, if you decide to cancel your purchase, you may be subject to a restocking fee.
Avenue for Financial Abuse
BNPL is prone to financial abuse because it is easy to open accounts and make purchases without having to undergo a credit check. This means people with bad credit or no credit can still access these services. Additionally, the ease with which one can make BNPL payments means that abusers can rack up debt in their victim’s name without them knowing.
So while BNPL might seem like a convenient and seemingly money-saving shopping method, its use raises various debt and data privacy issues. If you’re considering using BNPL, be sure to weigh the pros and cons carefully before making a decision.