The concept of layaway isn’t a new one, but online shoppers are finding themselves in unfamiliar territory as Buy now, pay later (BNPL) offerings push them further into debt.
According to new research from Capterra, BNPL is taking advantage of financially illiterate shoppers despite what they may think.
In the company’s 2022 Buy Now, Pay Later Survey, nearly all (95%) of shoppers say they’re confident they can make their next payment on time and 65% said they’d be more likely to purchase from a business offering BNPL.
“When implemented correctly, business can help customers access previously gated financial opportunities, and in some cases, help them build credit.”
In a news release, survey findings show that despite acknowledging the Consumer Financial Protection Bureau’s (CFPB) multiple risk advisories, most shoppers (57%) are more likely to use BNPL in the future.
Vulnerable communities can especially be adversely affected by the booming BNPL market, whic is expected to reach $3.98 trillion by 2030. As Nasdaq points out, 27% of Black households are late on paying their debts.
“Responsible payment offerings are of utmost importance for businesses using BNPL, especially because users are primarily younger and minority groups who are more likely to have no credit history,” says Max Lillard, senior finance analyst at Capterra. “When implemented correctly, business can help customers access previously gated financial opportunities, and in some cases, help them build credit.”
Capterra also points out that BNPL marketing can be deceptive, so it’s important that businesses provide transparency upfront by clearly outlining terms and conditions beyond simply linking to the BNPL vendor website at checkout.