| Many players out there fighting fiercely to get more customers, every-time making it easier to get financing, which might not necessarily be the best on the long run or in the best interest of consumers. There has been multiple analysts and news outlets writing about this. When 33% of users from BNPL services claim that a reason to do it is that their credit cards are already max, I see this as a potential issue. Also as someone that has been testing & doing research on this field, it is amazing how the services differ between Europe/US and Latam (probably Africa too but I didn't dig into this one yet). BNPL services in Latam charge quite high interest to the consumers. I'm a bit worried when I get ads to pay for sneakers over the course of 3 months and they would end up costing around 30% more, which means many people actually purchase such items in such way. What are your guys thoughts? While easier access to credit can be quite helpful, it does seem like there might be some potential issues in the industry, particularly in these days. |
I've argued against this so many times, both online and to the management at a previous job. There is a small group of people to whom these payment options are completely sensible, and they manage them very responsibly. These people will argue in favor of Buy Now, Pay Later as well as easy access to small loan, reasoning that they are a good options for people like themselfs.
Their argumentation is more or less valid, it's just they aren't the target customers for this type of payment. It might not be situation anymore, but it the past a company like Klarna made no money on a customer who paid off their loan on time. The entire business model was people who needed payment plans, people who made bad finasical choices, people who were already poor.
My take is that BNPL is such a dangerous product, for a certain group of people, that it should be at least be restricted to select purchases. For instance, you should NEVER be allowed to use it for fashion, consumer electronics, and other now essential goods. Sadly that's where these options are primarily presented to consumers.