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The next frontier for buy now, pay later is plastic


The face of rising inflationhigher interest rates and slowing economic growth, there’s more competition than ever for consumers’ dollars — even how their purchases are made.

In the midst of the pandemic most consumers preferred to buy now and pay later for payment. This is still true today: The popularity of installment buying has increased along with an increase in overall demand. online shopping.

Now, AppleApple Pay Later is now available, allowing the user to make four payments in six weeks. This puts a dent in similar offers from other companies such as Affirm and PayPal, according to David Morris, Insider Intelligence’s principal analyst.

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“This will further pressure BNPL fintechs, which are already facing regulatory, competitive investor tailwinds,” he said.

Charlie Youakim (Sezzle CEO) says that it is possible. He said that the good news was “the sector continues its growth.”

Experian found that 4/5 Americans already use BNPL to purchase everything they need, including clothing and cleaning supplies. Most shoppers also believe that buy now, Pay Later could replace traditional methods of payment. credit cards.

Online shoppers have the option to buy now and pay later at Amazon, Target and Walmart. Many providers also offer browser extensions that you can use for any purchase online. There are also apps that allow you to make installment payments. buying things in person.

But as Americans tighten their belts, BNPL’s big players, including Sezzle, Zip, Affirm and Klarna, are trying a new tactic to lure consumers — and it looks a lot like an old credit card.

All have announced the release of a physical card, which will be linked to You can pay interest-free instalments over time from your bank account

Apple wants to eliminate all physical wallets, but rivals claim there is still room for plastic and that these innovative offerings can be used in place of it.

This sector still needs regulation.

Amrit Dhami

GlobalData Associate Analyst

Max Levchin of Affirm, the CEO said “We think Affirm Debit+ represents not only the biggest upgrade to the card’s debit function since it was first introduced over 50 years ago,”

Experts warn consumers that multiple BNPL loans could lead to multiple repayment dates. debt spiral.

Amrit Dhami (an associate analyst with analytics firm GlobalData) stated that the sector still needs regulation. To ensure that consumers are aware of the fact they have BNPL debt, and how it can adversely affect their credit scores, transparency is key.

Luis Alvarez | Digitalvision | Getty Images

Consumer Financial Protection Bureau opened an inquiry into how BNPL lenders are using consumer data and reporting that information.

Financial watchdog stated that it is especially concerned with how the programs will impact consumer debt accumulation as well as which consumer protection laws are in place.

Rohit Chopra, Director of CFPB, said that the problem with this is they end up racking up a lot more debt when they use buy now, pay late for more expenses like groceries or other items in stores. recently said in an interview with CNBC.

The CFPB has not yet announced its next steps.

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