The rise of Buy now pay later schemes (BNPL)
The rise of Buy now pay later schemes (BNPL) I try to buy £80 pounds worth of groceries at the local Tescos. On a usual, I would have to spend take the £80 pounds out of my account and pay right there and then. Yet, with services such as Klarna, I can now pay in 4 installments of £20 pounds over 4 weeks. The extra £60: I can just spend this on a potential day out with the lads instead. This is buy now pay later, and Im sure you can already see the dangers of such a scheme. There are a couple questions I have approaching the topic. Is this going to cause an asset bubble? What happens if multiple people are unable to pay back loans to the companies (defaults)? The industry is essentially an alternative of credit cards. Klarna is a widely used BNPL service in the UK and US, letting customers pay in three installments, within 30 days, or via longer-term financing. Clearpay splits payments into four interest-free installments over six weeks, while Zilch offers flexible, zero-interest p...