Bankrate’s Post

With Buy Now Pay Later its easier than ever to slip into debt. #BNPL services are increasingly popular, and a new Bankrate survey found that 56% of BNPL users say they have encountered at least one issue while utilizing these services. #SmarterBanking #PersonalFinance #Debt #Credit Bankrate insights: Buy now, pay later has become more widespread among Americans. 39% of U.S. adults say they have used at least one buy now, pay later service. PayPal Pay in 4/Pay Later (16%), Affirm (12%), Afterpay (12%) and Klarna (11%) are among the most widely used services. More than half of surveyed users experienced issues related to the service. 56% of users say they experienced at least one problem while using a BNPL service. Overspending (29%), difficulty returning a purchase/obtaining a refund (18%) and missing payments (18%) are among the most common ones. Spreading out cash flow is the main reason for BNPL usage. 50% of users chose this payment method to stretch their cash flow — more than any other reason. The appeal of low/no interest rates came in second at 37%. Millennials are the most likely to have used buy now, pay later. 55% of millennials reported using BNPL — the largest percentage across generations. Urban residents use this payment method more than others. 46% of urban residents say they have used a BNPL service, compared to 35% and 34% of rural and suburban residents, respectively. https://lnkd.in/gbBKf_pq

If you’re an avid online shopper, you’re probably familiar with buy now, pay later (BNPL) which gives consumers the chance to make online payments over time rather than paying the full price up front. After reaching a peak in popularity around 2020, BNPL adoption has started to slow down in recent years. Read the Bank of America Institute analysis on this common way to pay. bit.ly/3Yp40Ph

The rise of Buy Now, Pay Later services (BNPL) has significantly influenced consumer behavior, particularly among Gen Z. Read Nandan Sheth’s latest Forbes article "Debunking 5 Myths Around Gen Z and BNPL" which highlights some common misconceptions about Gen Z and their relationship with BNPL and card-linked installments. Myth 1: Gen Zers are the least concerned about BNPL loans impacting their credit scores. Myth 2: Gen Z is ditching credit cards in favor of traditional BNPL services. Myth 3: Gen Z primarily uses BNPL for low-cost items. Myth 4: BNPL will enhance retention of younger shoppers. Myth 5: Only low-income shoppers want to pay with installments. Read the full article to discover the insights: https://lnkd.in/eGKM_Fqq #GenZ #BNPL #FinTech #CreditCards #MythBusting #ConsumerTrends #SmartShopping #FinancialEducation 

While Buy Now Pay Later (#BNPL) is not new (it has been around several decades before the credit card creation), it has come back in fashion along with the latest wave of financial tech #innovation flagshipped by #fintechs like Klarna and Affirm. However, this product represents several risks for the consumer and the financial system as a whole: 1. For the consumer 🔄Overborrowing: BNPL services can encourage consumers to spend more than they can afford, leading to increased #debt, as well as financial strain when deferred payments are mismanaged and multiple payments are due simultaneously. 🔄#Credit Score Risks: Missed or late payments can negatively impact consumers' credit scores, especially if the BNPL provider reports to credit bureaus. 🔄Limited Credit Building: Unlike traditional credit products, positive payment history with BNPL providers may not always be reported, limiting consumers' ability to build their credit scores. 🔄Interest and Fees: While many BNPL services advertise interest-free periods, they may charge high late fees and #interest rates once the promotional period ends. 🔄Opaque Terms: The #termsandconditions of BNPL agreements can be complex and lack #transparency, leading to unexpected costs for consumers. 2. For the merchant 🔄#Merchant Fees: Merchants may incur higher #transactionfees for offering BNPL services, which can eat into their profit margins. 3. For the financial system 🔄Lack of #regulation: BNPL services often operate in a regulatory gray area, lacking the stringent oversight applied to traditional credit products. 🔄Consumer Protection: The absence of robust regulations can result in inadequate #consumerprotection, potentially exposing users to unfair practices. 🔄Systemic Risk: Widespread use of BNPL can contribute to #systemic financial risk if a significant number of consumers default on their payments, impacting both consumers and financial institutions. 💳📉🔍 #BuyNowPayLater #ConsumerDebt #FinancialRegulation #CreditImpact #HiddenCosts #MerchantFees #EconomicRisk

In recent years, the "Buy Now, Pay Later" (BNPL) model has skyrocketed in popularity, offering consumers the allure of instant gratification without the immediate financial burden. However, the promise of deferred payments has led to a significant and often overlooked downside… Delinquency. A recent Harris Poll found that 43% of those who owe money to BNPL services said they were behind on payments, while 28% said they were delinquent on other debt because of spending on the platforms. This figure should raise alarm bells, not just for consumers, but for the broader economy as well. The Dilemma ? Online shoppers using these installment loans spent an estimated $19.2 billion in the first quarter alone—a 12.3% increase compared to the same period last year. The Data on their installment loans is not provided to credit bureaus. A “Black Box” model This lack of transparency creates significant challenges: In The Bigger Picture… 1. **Economic Stability**: Accurate credit reporting is vital for the stability of the financial system. Incomplete data can lead to poor lending decisions, affecting both consumers and lenders. 2. **Consumer Protection**: Transparent credit reporting protects consumers by ensuring they are aware of all their financial commitments and risks. There are complexities and risks associated with BNPL services and credit reporting. It’s crucial to stay informed. #money #loans #buying #bnpl #debt #consumer #money

What are the differences between BNPL (Buy Now Pay Later) and SNBL (Save Now Buy Later)? 💡 . The diagram below shows how both BNPL and SNBL work. 🔹 With BNPL, Bob pays with credit, and BNPL providers help fund Bob’s purchase. The merchant immediately gets the money from BNPL providers, but with a discount. Examples: Klarna Affirm Afterpay. 🔹 With SNBL, Bob first saves cash in a virtual savings account. Once enough money is saved, the product is unlocked, and Bob can purchase it. Bob will get cash rewards from the merchant for saving up. Examples: HyperJar Cashmere App. 🔹 Both models target reducing shopping cart abandonment. However, BNPL has late fees as a penalty. SNBL, on the other hand, focuses on money planning and management, where multiple virtual savings accounts can be opened for different purposes. Also, the customers get rewards from the merchants, which means the return on the savings is much higher than keeping it in the bank. Interestingly, SNBL vendors are functioning like a marketplace. They work with many merchants to offer specific products to customers and negotiate cash rewards. Source: Hua Li x ByteByteGo - https://bit.ly/3HTYDyl #Innovation #Fintech #Banking #Marketplace #OpenBanking #EmbeddedFinance #API #FinancialServices #Payments #Loans #BNPL #Savings #SNBL 

Buy Now Pay Later Payments Expected to Grow by 22.4% in Africa And The Middle East Buy Now Pay Later (BNPL) Payments is expected to grow by 22.4% in Africa and The Middle East on an annual basis to reach US$15.5 billion in 2024. According to research, the comprehensive landscape of the Buy Now Pay Later (BNPL) industry in Africa and the Middle East is expected to achieve significant growth in the upcoming years. The payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 16.1% during 2024-2029. Read more👇 #payments #bnpl #buynowpaylater #financialinclusion #fintech #ecommerce

Buy Now, Pay Later ✌🏼 “Buy now, pay later” (BNPL) is increasingly popular, yet it’s also racking up “phantom debt” that is difficult to track! 🔴 54% of BNPL users say it allows them to purchase more than they can afford… 🔴24% say their BNPL spending is “out of control.”.. 🔴 43% of BNPL users who owe money said they were behind on payments… 🔴 28% said they were delinquent on other debt because of spending on the platforms… 🔴 48% say they have started or have considered using BNPL to pay bills or buy essential items, including gas and groceries. __ The Harris Poll x Bloomberg https://lnkd.in/exKJZKn5

With automatic cashback, financial institutions are giving cardholders an added incentive to pay with their bank card and bring their card to the top of customers' wallets. In fact, cashback programs offering a seamless earning experience without offer activation see a 29% increase in average spending and an 18% lift in average card frequency among onboarded clients who’ve earned a reward. The figures for inactive clients climb even further, reaching 106% and 24% respectively. For more insights on the benefits of cashback and how financial institutions attract, engage, and retain clients with an automatic cashback solution, download our e-book here 👉 https://lnkd.in/eXjzWR2t #automaticcashback #loyalty #rewards

The rise and fall of BNPL providers in recent years offer valuable lessons for the fintech sector. From explosive growth to sobering realities, the journey has been illuminating. Insights from industry experts, such as our own Managing Director, EMEA, Frode Berg, shed light on the forces reshaping the BNPL landscape in this The Fintech Times article.