As more companies get into the financial game, young customers are choosing to buy now and pay later

As more companies get into the financial game, young customers are choosing to buy now and pay later

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  • What do you think about this story? Do you have a question, experience or story tip to share? Send them in an email to According to analysis conducted by SIA Partners, the buy now, pay later (BNPL) share of retail e-commerce and point-of-sale transactions in the U.S. was less than two per cent in 2021, but is expected to double to four per cent by 2025. Apple is the latest company to enter the market, announcing on Monday that it will offer financing options for purchases made via Apple Pay. The new service, Apple Pay Later, will be available in the U.S. in the fall. (Apple has not disclosed when the service can be expected to be available in Canada.)

  • Apple announced on Monday that BNPL financing will be available through Apple Pay. CBC News’ Nojoud Al Mallees Posted at 4:00 a.m. ET on June 8, 2022 | Updated 7 hours ago Personal financial experts warn that popular buy-now, pay-later instalment loans might harm consumers’ finances, particularly among the young. When Jameil Joseph goes to check out his online shopping basket, he frequently selects the “buy now, pay later” option. “Whenever they’re accessible, I use them,” Joseph explained. “It’s always preferable to have a little extra cash on hand.” Online merchants are increasingly collaborating with financial service providers to enable clients to make purchases while only paying a percentage of the total cost up front.

BNPL — offered by providers like Afterpay, Klarna, PayBright and Sezzle — is essentially like a point-of-sale loan, where a customer purchases an item, then pays for it through regular instalments over the course of a few weeks or months. But such services are also catching the attention of financial regulators around the world, as the industry currently has few regulations. These schemes aren’t exactly new — car dealerships and furniture stores have commonly offered no-interest financing options for years. But BNPL loans are becoming more mainstream and better integrated with online shopping platforms, giving consumers the chance to finance nearly any kind of purchase with the click of a button.

These buy-now-pay-later schemes have found particular success with young consumers, allowing them to access these loans with very few barriers. At the same time, the rising popularity of these services is raising concern about the impact they have on consumer debt. Joseph, a 30-year-old who lives in Toronto, says he has a good handle on his finances. At the same time, he concedes that these services can encourage people to spend more. “Sometimes, you know you want to buy something; instead of waiting, you can buy now,” he said. Young people attracted to easy-to-get loans. It’s a message that’s playing out on social media platforms like TikTok, where influencers are partnering with BNPL companies to market these services with skits, songs and dances.

Buy now, pay later. It’s an old concept and a simple sentence, but it’s driving financial tech startups to get into the world of offering credit and installment payments. Producer Anis Heydari looks at whether the trend in “reverse layaway” is a new way to pay for whatever your heart desires, or the same ol’ credit card routine. PayBright, for example, which offers BNPL services in Canada, partners with more than 5,700 retailers — including The Bay, Steven Madden and Apple — to offer six-week interest-free instalment plans. According to their website, they’ve approved more than $1.76 billion in consumer credit since their inception in 2009.

“You get a little bit of instant gratification, because you may see a luxury brand purse, or a luxury brand phone, or something that may be just a little bit beyond what you can afford on a day-to-day basis,” said Abhishek Sinha, a partner at the consulting firm EY Canada. But you still are able to actually acquire that good or service, and pay for it over a period of time.” The growing popularity of BNPL prompted the Financial Consumer Agency of Canada to conduct a pilot study last year on the use of these services. While the findings were not statistically significant due to the small number of people surveyed, the study found that of those surveyed, young consumers between the ages of 18 and 34 use online BNPL services the most.

The top reasons why consumers turned to these services were budgeting, inability to pay the full price of a good or service, and to avoid interest and fees. Julia Drybrough, from Winnipeg, says she likes using BNPL services because they make purchases more “palatable.” “I buy items that i consider ‘treat myself purchases,’” said the 24-year-old, who works in the service industry. “Things like makeup, shoes and clothes that I couldn’t justify due to the reduced hours I was working because of the pandemic.”


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