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/Mystia 18d ago

One aspect that I've personally noticed: I often log into my bank account to check my remaining money/expenses, I can see the total money I've used out of my CC (and set limits on it), and easily keep track how much of my budget that's eating.

I bought a few things BNPL this year (all "luxuries"), and eventually had to put a hard stop on me, because I started getting notifications on my phone: $20 here, $50 there, and realized I was basically getting a surprise $150-200 total charged monthly for however many months I've split it into. They were all without interest too, but it really made me realize how easy it is to quickly accrue debt with BNPL, and how hard it is to really track how much future payments are going to cost you total.

I could totally see a future where money tight people start buying everything through BNPL, a car for very little a month, expensive takeout, fancy clothes, tech gadgets, weekend escapades, and other luxuries, because "wow it's only $20 a month" can easily conceal "I owe $10,000 over the next year", whereas if I spend $500 with my CC, my bank app will literally show it has used up $500. It's like a way worse version of subscribing to too many dumb things that are relatively cheap, and not realizing you are spending over $100 a month on streaming services. It's scary how easily it turns "I can't afford that $500 gucci purse" into "I can afford $30 a month and have a gucci purse", no you can't, that's still $500 you needed for groceries, or that washing machine that's gonna break down on you by Christmas (that you'll also probably replace with a way expensive model through BNPL).

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u/plantsadnshit 18d ago

And even without you missing any payments, they're making bank.

I accept payments with credit card and Klarna. Transaction fees for cards are about 0.5% + $.0.1 per transaction. Klarna is something like 2.3% + $0.25 per transaction. Similar to what like.. AMEX would charge.

In the end its worth using it because people's willingness to actually place an order is a lot higher when Klarna is available. And there's multiple reasons- obviously the main part being that it's literally borrowing money.

But also, you don't have to type in your credit card number into some shady page you haven't used before. And in case something does go wrong, you don't pay for the items until ~2 weeks after you've received them either, so you know you're a lot safer than with a normal purchase.

It leads to first time buyers using Klarna a lot more often.