Buy Now, Pay Later (BNPL) is a feature that online shops has implemented. This feature was a big hit during the pandemic. However, there are risks that follow with the use of this feature and what kind of impact Buy Now, Pay Later will bring?
This new payment method is commonly used among Gen Z shoppers who are in theirs teens or in their 20s. According to Experian’s 2022 Global Insights Report, it has been concluded that up to 17% of surveyed Malaysians has used the feature within the last six months. 46% of Malaysians are most likely to be using the feature again in the future. The BNPL feature is most used for beauty and wellness products. This can be concluded as 67% of the surveyed Malaysians uses the feature for said products.
The Impact it Brings
This shows that this feature is being widely used by our locals. Though this new feature is a good approach of increasing purchasing power, it comes with risks. The impact of Buy Now, Pay Later includes risks of overspending. Since this payment method is for items they aren’t able to afford if paid upfront, this will cause excessive debt. Not only that, shopper will also have difficulties in managing their financials. With the use of BNPL, shoppers will be more encouraged to purchase more and borrow more.
Once shoppers are unable to manage their financials, they can miss out on repayments or pay later. This will impact shoppers negatively as there will definitely be late payment fees and other fees, sometimes such as collection fees. To quote an example, Lazada charges shoppers as much as RM30 for any as overdue fee. The impact of Buy Now, Pay Later can really make shoppers lose control of their own financial management. Once you have you have used the feature, never forget to take note on how much you have spent, how much you have to pay and when you have to pay. Otherwise, your financial management will be in turmoil.