Here Are The Surprising New Places ‘Buy Now Pay Later’ Is Showing Up

We’ve previously covered the rise of installment-plan purchasing, whereby so-called “buy now pay later” lenders allow people to make relatively small purchases and pay for them over time. While these options have some potential benefits over traditional credit cards (lower qualification thresholds, limited fees, etc.), it’s easy for folks who overuse these plans to get deep into debt.

And now that BNPL services are being integrated into a growing number of transactions, it’s more important than ever for consumers to understand the risks and rewards of using them.

In-house alternatives

Perhaps you’re familiar with some of the early leaders in this emerging industry. Companies like Klarna and Affirm grew exponentially during COVID-19 along with a surge in online shopping.

Since the economy has reopened, the outlook for these firms has been slightly less rosy. One report found that 56% of adults had taken out at least one BNPL loan in 2021, but just 35% said the same last year.

This doesn’t mean BNPL is over, though. In fact, a growing number of retailers and service providers are getting in on the action by either launching their own services, partnering directly with an established brand, or even buying out loan providers directly.

Where you’ll find them

There are several sectors of the economy that are increasingly implementing BNPL options within their existing business model. A few of the most notable include:

• Credit cards: If you can’t beat ‘em, join ‘em. That’s what companies like Mastercard and Amex figured when rolling out their own installment-pay programs.
• Retailers: Walmart made news earlier in April by introducing its own BNPL service after a partnership with Affirm that dated back several years.
• Banks: If you bank with institutions like Chase or Citibank, you might have noticed a new BNPL option for your recent qualifying purchases.

Chris Agee June 10th, 2024

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