The explosion in Buy-Now-Pay-Later (BNPL) has caught the eyes of lawmakers and regulators, who are taking a closer look at this booming industry.
BNPL payment offers allow consumers to purchase goods or services now and pay for them over time, often through a short series of installments (for example, four payments spaced two weeks apart). Industry researchers have found that Gen Z consumers increased their use of BNPL products from 6% in 2019 to 36% in 2021. However, with this growth, lawmakers and regulators have voiced concerns about BNPL, including that consumers may easily spend more than they can afford and rack up multiple BNPL purchases with varying payment schedules and payment terms.
Read our 360 Degree Analysis of Buy-Now-Pay-Pater Products
The list of consumer protection concerns raised by lawmakers and regulators is long. Consumers may face late fees, fees for failed payments, payment rescheduling fees, early payoff fees, account reactivation fees, or other fees charged by BNPL providers that may not be readily apparent.