Retail

Buy Now, Pay Later: The eCommerce Revolution

We’ve all heard of Buy Now, Pay Later (BNPL) offers. In fact, there’s a good chance that you have recently been presented with a BNPL offer, as online platforms have started using them quite aggressively of late! BNPL kicks in at the point of sale, giving consumers a financing option that has gone viral—particularly with Millennials and Generation Z (i.e., those born between 1981 to 2009). Indeed, BNPL solutions are a recent development that cuts to the heart of easing customers’ affordability obstructions. The category introduced an impressive agenda aimed at disrupting the markets credit card companies (CCCs) like AMEX, Visa, and Mastercard, attacking the latter’s unreasonably high fees and APRs. In addition, poorly implemented rewards programs have contributed to the worsening credit card image in consumers’ eyes. An Insider Intelligence study maintains the CCCs’ somewhat inflexible financing system allows their card users to build up massive liability at zero APR and then, within eighteen months, switch the unpaid balance into the mind-boggling realm of 19% to 29% annual charges. Unfortunately, their card users have little choice but to pay up, as cutting into debt at that point is like a mouse trying to get an elephant’s attention. Moreover, the COVID-19 pandemic messed with consumer habits, substantially turning our lives upside down. One of the things to fall through the cracks was paying bills on time, even making minimum credit card payments. As a result, FICO scores cratered, and access to stable credit went south for many, significantly impacting aggregate […]