CFBP report on BNPL services like Apple Pay Later shows risks rising


Two huge things happened in the buy now, pay later (BNPL) consumer finance space in March. To start the month, top consumer finance regulator the Consumer Financial Protection Bureau (CFBP) released a big study on how BNPL is impacting consumers. To end the month, Apple entered the sector with its long-anticipated Apple Pay Later product. Below is an excerpt from the CFBP BNPL report, and below that are links to the report and our initial analysis on Apple Pay later.


Buy Now, Pay Later (BNPL) began gaining ground in the United States in 2019, but between 2019 and 2021, the number of BNPL loans issued to consumers increased by almost tenfold.

Historically, most forms of credit have involved buying something now and paying for it later. Consequently, many different loan products have been marketed as BNPL.

For the purposes of this report, BNPL refers exclusively to the zero-interest, pay-in-four (or fewer) installment loan that facilitates purchases at the point of sale. These credit products differ from traditional installment loans in important ways:

– The average loan amount is $135 over six weeks compared to $800 for traditional installment loans over a period of 8-9 months

– BNPL is offered at 0% interest, while traditional installment loans often carry a positive interest rate.

We explore consumer use of alternative financial services such as payday or pawn loans using survey responses. We find that BNPL use varied widely across the population.

On average, 17% of consumers borrowed using BNPL at least once in the year prior to the survey.

Black, Hispanic and female consumers and those with household income between $20,001-50,000 were significantly more likely to borrow using BNPL compared to white, non-Hispanic and male consumers, or those with household income below $20,000.

In contrast, those with at most a high school degree were less likely than consumers with at least a bachelor’s degree to use BNPL.


3 Reasons Apple Pay Later Will Eat BNPL Competitors & 3 Consumer Risk Questions (TBP)

CFPB March 2023 report on consumer use of buy now, pay later

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