The cat in the hat
“The cat in the hat” – a cartoon that illustrates the dangers of the Buy Now Pay Later (BNPL) payment option.
BNPL, which allows consumers to pay in interest-free installments, is a trend exacerbated by the coronavirus pandemic and is now a $750BN market that represents 14% of all retail sales.
Firms like Klarna and AfterPay are targeting Gen Z and millennials, of which research by Insider Intelligence identified 38% use BNPL “to make purchases that otherwise wouldn’t have fit in my budget.”
While interest rates and the economy continue to perform, BNPL will be lauded as an innovative new financial mechanism, but should the economy turn, expect the industry to become known for distressed debt and predatory lending.
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