W

welcome to the australiabusinessblog.com Exchange, a weekly newsletter for startups and markets. It is inspired by the daily australiabusinessblog.com+ column from which it takes its name. Do you want it in your inbox every Saturday? Register here.

Buy now, pay later is an attractive option for consumers, perhaps even more so in times of recession. But with rising debt and inflation, perhaps the focus should be on companies that help protect borrowers from digging themselves into a hole. — Anna

The lasting appeal of buying now, paying later

I thought tougher economic times would create an immediate headwind to the “buy now, pay later” trend. I was wrong.

“BNPL is a form of credit that allows a consumer to break a retail transaction into smaller, interest-free installments and pay back over time,” and it is “in the midst of rapid growth,” a Sept. Report of the Consumer Financial Protection Bureau mention.

More recently, the Financial Times reported that “demand for BNPL boomed during the pandemic and has continued to grow, according to data from UK open banking fintech Snoop.”

This is not just a Gen Z trend, the FT added: demand “has surged across all age groups in the UK, including older people, who are under pressure from the cost of living crisis and in need short-term credit.”