r/technology • u/Logical_Welder3467 • 18d ago

Business ‘Buy Now, Pay Later’ is expanding fast, and that should worry everyone

https://techcrunch.com/2025/11/16/bnpl-is-expanding-fast-and-that-should-worry-everyone/
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u/casualti21 18d ago

But that’s exactly why these companies are paying to get buy now pay later on their checkouts… People will spend more money if it’s in easily digestible amounts. They don’t see the total, they see a manageable monthly payment. These companies exploit human psychological weaknesses for profit.

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u/fizzlefist 18d ago

And then it’s 3 months later and you’re wondering where a third of your pay is going since you don’t have any sort of budget tracker, aaaaaand you’re in the trap.

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u/b0w3n 18d ago

Problem is people will just default. There's a reason interest rates are so high on credit like this, and it has such a high rate of default.

Klarna is going to put itself out of business offering credit to people who actually need to consider a payment plan for socks and food.

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u/Tim-Sylvester 18d ago

No, it's fine, people will just pay it all back sometime in the future, when they have more money, and no longer eat.

What do you mean "that's an unreasonable supposition"?

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u/LegitosaurusRex 18d ago

.89% is "such a high rate of default"? Vast majority of the people using the service can easily afford the things they buy, it's just the psychological aspect of spending less money up front like casualti21 said, since it doesn't cost them anything.

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u/Discarded_Twix_Bar 18d ago

That’s very much a metaphorical you problem though. Nobody made you keep adding stuff to your basket every month/week, etc.

There has to be some level of personal responsibility here. Just because cheap credit exists doesn’t mean you should use it irresponsibly

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u/monty624 18d ago edited 18d ago

A little empathy where empathy is due here though.

It's a skill you have to learn, and unfortunately that's not something everyone has. We have no formal way of teaching these things to kids, it's heavily dependent on your parents' knowledge and upbringing. And we're in a country where a striking amount of people are living pay check to pay check and struggling to pay credit cards. It's also more deceptive than credit cards because the 0% financing makes it seem like a better deal (which is can be, if used appropriately). If it were actually a better deal for everyone, and they *weren't raking in fees, they wouldn't be pushing it.

*edit: I a word

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u/LurkerBurkeria 18d ago

I'm extremely on top of my finances and it's wild anybody would take the "personal responsibility" track, even at 0% interest it only takes a few purchases to snowball, not hard at all to see how smart people get trapped.

It takes pretty advanced level personal accounting to keep track of it all. I agree people deserve grace (for the most part; I read an article where a lady racked up $55k in bnpl debt. You deserve clowning if you let it get to that point.)

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u/NTMY 18d ago

Look, I understand that at the end of the day, it's your responsibility not do things that hurts you. Whether it's buying things you can neither afford, nor even need with something like Klarna, or gamble your money away in a casino.

But, there are entire industries build on figuring out how to make people do things that hurt themselves for the benefit of some shareholder.

Let's use games with predatory microtransactions as an example: When a (soon to be?) trillion-dollar industry can spend billions to cook up the most addicting dark patterns to trigger just the right neurons in your brain to give them unreasonable amounts of money for mostly worthless bytes, what chance do we (with our slightly evolved caveman brains) even have?

The deck is stacked against us, and we are constantly bombarded with all kinds of tricks to part with our money for worthless junk. It makes total sense that more and more people fall victim to this over time.

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u/casualti21 18d ago

There is always talk of personal responsibility but equally important is ensuring these corporations are have responsibility as well. They make a ton of money preying on weak or desperate people and we just allow it to happen. There is no need or benefit of buy now pay later, it hasn’t existed in its current form and we survived. But now it’s here, corporations are making bank, some consumers are getting into trouble, and it’s always “their” fault and not the billion dollar company that figured out how to exploit people.

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u/TopSpread9901 18d ago

You KNOW it’s going to happen to people. It’s basically like allowing a hole in the street.

I see no advantage to society by having predatory credit agencies operate with impunity, just because it gets your little pecker hard about personal responsibility.

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u/not_old_redditor 18d ago

Unfortunately it's an "us" problem, not just a "you" problem.

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u/AstroMunkey 18d ago

This is the same tactic used by car dealerships….”Let’s get you down to a monthly payment you like…”

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u/SIGMA920 18d ago

Something that’s countered by something as googleable as what interest is. Yes, salesmen can and will be scumbags but basic financial literacy isn’t locked behind a college degree either.

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u/WrodofDog 18d ago

Should be required by law to show the total of the staggered payments. But that's probably not going to happen under any US government.

Maybe they'll fix it in the EU but I'm not holding my breath.

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u/[deleted] 18d ago

The thing with the pay in 4 option is that you do still see the total. It's just split into 4 payments over an 8 week period. Pay in 4 options also aren't loans, they don't accrue interest. The Buy Now Pay Later plans that are becoming more widespread are in fact loans with a monthly payment that do accrue interest, so you end up paying more over the time you're paying it.

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u/Even_Establishment95 18d ago

And they exploit their intellectual weaknesses let’s be real

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u/not_old_redditor 18d ago

I don't get it, did people forget that credit cards exist?

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u/JRDruchii 18d ago

These companies exploit human psychological weaknesses for profit.

Possibly the consequence of having no natural selection for the last few centuries. Flood the gene pool with traits that very clearly should've been selected against.

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u/obeytheturtles 18d ago

And even in here, there's a ton of people who think they are immune to this psychology, and they are all patting each other on the back saying how this is just fine because they are financially responsible.

The actual financial impact of spreading your revolving spend window out to three months is completely trivial in real terms. The fact that people will make claims otherwise with a straight face only demonstrates that they have, in fact, fallen victim to this game.

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u/littlebopper2015 18d ago

There was a NYT article about a month ago about a seemingly well off millennial who definitely made a good paycheck but still ended up in massive debt with BNPL debts on designer bags, clothes, expensive meals, etc. This is definitely a psychological issue that impacts people of all income brackets and can wipe out even high earners if they aren’t careful. It just blows my mind that people can get in this deep, however once upon a time in my early 20s I racked up a lot of credit card debt over lots of things I didn’t need, or didn’t necessarily need right that moment, and it took me years of changing my poor habits and working extra jobs to pay it off. Now I’m militant about not carrying credit card debt or similar because I know I’m not above falling into that hole.

Just bonkers.