Pros and Cons of Buy Now, Pay Later: Onion Style

Satire site takes on popular way to buy stuff you can’t afford

Andy Spears

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Photo by freestocks on Unsplash

I’ve written quite a bit about the popular fintech credit tool known as Buy Now, Pay Later (BNPL).

Essentially, these plans — offered at point of sale in online or in-store transactions — allow consumers to buy something now for only 25% of the total purchase price and then make 3 additional payments (usually 2 weeks apart) until the full price is paid. PayPal’s “Pay in 4” is an example. Brands like Klarna and Afterpay also play in this space.

The reality of BNPL is that it can wreak havoc on a consumer’s bank account. Especially if, as is typical, they end up with more than one BNPL plan at a time.

In fact, one survey indicated:

32% of Buy Now Pay Later plan users have had to skip paying an essential bill such as rent, utilities or child support in order to make their payments. Even after that, 30% report that they’ve struggled to make their payments.

Maybe that’s why a website known for satire — The Onion — has taken a look at BNPL.

Here’s their take on these products:

PRO

  • Fun to not pay for stuff you buy.
  • Now is now and who even knows when later will be?
  • Collection agencies known for their compassion and understanding.
  • App could lose funding and fold before users have to pay.
  • There only a few, very rare instances when buying something you can’t afford ultimately doesn’t work out well.

CON

  • Chance that future you may also not have any money.
  • Humiliation of being $10,000 in debt to something called “Klarna.”
  • Makes it financially stupid NOT to buy a waterbed.
  • Detracts from adrenaline rush of having credit card declined.

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .