“Buy now, pay later” is sold like a modernized credit card, but does it even help your credit score?


The Axios team is out with a good primer on the ‘buy now, pay later’ (BNPL) industry. This is that thing when you’re shopping on online, and one of the checkout options lets you break up the purchase price into installment payments. But what about your buy now, pay later credit score? And how does BNPL help you in other ways?

It’s a great inducement toward more expensive purchases, and BNPL firms have added millions of customers in recent years.

But do you even get your repayment history added to your credit score with BNPL? Mostly not.

And can BNPL firms offer you other banking services? Mostly not.


All fintech (aka financial technology) plays like this follow a land-and-expand strategy.

They come up with a cool concept for one single product. In the case of BNPL, it’s easy installment payments at checkout.

Then they do it better than anyone else, and are rewarded with millions of customers.

So they keep raising hundreds of millions of dollars to build smarter technology and acquire more customers.

The more customers like you they get, the more you want additional services. Why can’t the rest of your banking be this easy, right?

Like if you bought something online and used a BNPL service like Affirm instead of your credit card, you might wish that Affirm had other banking services.

Or maybe the novelty is wearing off for you now.

You might wish you’d just used your credit card to have all your stuff in one place and/or to make sure your credit score is benefitting from your positive repayment history.

In any case, consumers and consumer financial services providers generally have the same goal:

To easily work together for as long as possible on as many banking services as possible.

Now we’re at an inflection point for single-product consumer financial services like BNPL.

Is it just a clever variation on the checkout theme for online shopping?

Or will certain of these firms expand into other banking services and/or get bought by banks.

If they want to keep all the customers like you that they’ve gained in recent years, they must do one or the other.


A Deep Dive into the “Buy now, pay later” industry (Axios)

The 4 Stages Of Fintech Startups (The Basis Point)

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