Who is Using Buy Now, Pay Later?
Profile of an emerging small-dollar credit market
The explosive growth of small-dollar credit product Buy Now, Pay Later (think products like Klarna, Affirm, Afterpay) has caused some concern among consumer advocates.
The products are not regulated like traditional credit products and they can, if overused, lead to a cycle of debt that is difficult to escape.
The question, then, is who is using these products and what would be the best protections for those accessing this new form of credit?
Jason Mikula at Fintech Business Weekly reports on the Buy Now, Pay Later market based on a recent survey conducted by the Consumer Financial Protection Bureau (CFPB).
Here are some key takeaways regarding BNPL users:
The report provides a descriptive analysis of demographic groups that are more or less likely to use BNPL.
It finds that renters, lower income, Hispanic, Black, and younger consumers are more likely to use BNPL.
MORE likely to be using other credit products as well:
In fact, BNPL users reported higher rates of using traditional credit products, like credit cards or personal loans, than non-users. A whopping 95% of BNPL users reported also having a…
