What: Concerns are growing that consumers could be pulling back on buy now, pay later as interest rates increase.

Why it is important: Instalment payment services have helped drive sales for years but retailers won’t be able to rely on BNPL as a major driver of sales in the near future in the current economic environment.

Data indicates that consumers are scaling down their use of buy now, pay later to smaller purchases and relying on it to manage their everyday expenses. Additionally, the number of luxury shoppers who use BNPL has also dropped so far in 2023 after years of increases.

Despite rising interest rates and inflation, BNPL is expected to continue to grow as more consumers and retailers adopt it.

Is fashion’s buy-now, pay-later boom over?