Impact and Regulation of Buy Now Pay Later (BNPL)

Researchers: Anu Jose, Michael King, Jane Kelly, Yvonne McCarthy, Christopher Palmer

Partners: Central Bank of Ireland

Location: Ireland

Sample: 3,000 Consumers

Timeline: 2023-2024

Theme: Consumer Protection

Description:

Buy Now Pay Later (BNPL) recently has become one of the popular innovations in the Fintech payment sector which allows consumers to spread the cost of a product over a number of months, generally, without interest. While this payment feature offers flexibility to a number of consumers, there is a growing concern on some consumers taking up more debt than they can afford to repay coupled with lack of understanding of related terms and conditions, resulting in financial adversity. Through an online trial, we intend to study the causal effect of BNPL on consumer spending patterns, disentangling the selection and treatment effects of BNPL. Additionally, we test for effective ways to improve consumer comprehension of BNPL products and their terms and conditions.