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The Good, Bad, and Ugly Sides of Buy Now, Pay Later (BNPL)


The Good, Bad, and Ugly Sides of Buy Now, Pay Later (BNPL)


Tobias Baer shares an article that questions the current, popular credit strategy of instant gratification with delayed payments. 

Buy-Now-Pay-Later (BNPL) is hot – and that makes it increasingly controversial, as it was made clear by Monday’s article in the Financial Times. Retailers love it as a way to increase sales, FinTechs as a way to build new, appealing lending propositions. But from a consumer’s perspective, is it good or evil?

The question whether BNPL is good or evil obviously would inform the regulatory stance as to what extent it should be regulated and even curtailed. Nevertheless, I believe that it is the wrong question. Very often, not least when it comes to regulating the financial industry, we pretend that the product is the problem. What if the problem is the consumer – or more precisely, the consumer choosing the wrong product? In the following, I will briefly argue the good and bad sides of BNPL before suggesting a better approach for regulating financial products.

Good arguments exist to let BNPL prosper

In the ideal case, BNPL creates a clear and positive effect for consumers. For some, BNPL allows to get the benefits of a certain acquisition earlier (e.g., the earlier you upgrade to a safer motorbike helmet, the lower is the risk of a debilitating injury). There even can be a good business case to use BNPL for certain groceries (e.g., it can enable a cash-strapped family to save money by buying certain items in bulk even though the family needs 100% of its current income to feed itself).


Key points include:

  • Regulations curtailing access to BNPL
  • Four reasons why some view BNPL critically
  • A better approach to regulating consumer finance


Read the full article, Is Buy-Now-Pay-Later Good or Evil?, on LinkedIn.