What:  An opinion against BNPL solutions based on their potential social impact

Why it is important:  at a moment when CSR is getting an important topic, retailers should also take into considerations their present actions, which might backfire in the future.

Instant gratification through shopping has become the norm for many customers now that the world has become digital, and Buy Now Pay Later solutions are making this evolution more easy than ever. We already reported through an IADS Exclusive these solutions here. These solutions allow customers to access money to fund their purchases. The issue with this system is that one can not talk about credit or loan, as it is completely unregulated, and, according to the article, could be rather called “get-now, pay-later” money (or bad debt).

According to the article, the value of transactions funded by such a system in Australia and New Zealand alone grew by +90% between 2017 and 2019, before the Covid-19 pandemic started. It seems that users are usually lower-income customers, which is an issue on the long term.

Although BNPL solutions are critical for retailers as it significantly contributes to their sales, the article argues that retail companies should get the control back, by not letting fintechs access the data, and be closer to their customers. This implies, somehow, resisting the lullaby of the BNPL Eldorado and taking care of the clients by not luring them into being in excess debt.

BNPL