Normalising debt through Buy Now pay Later finance

This research investigates consumer indebtedness, in particular, how the introduction of buy now pay later (BNPL) lending affects consumer behaviours, where consumers face high energy costs, increasing rental/mortgage outgoings and a step rise in food prices. Our earlier work (Brown et al., 2021; Brown et al., 2017) into consumer indebtedness has shown that unsecured borrowing, such as payday loans, can have very damaging effects on consumer wellbeing. BNPL is an arrangement that allows consumers to buy and receive goods and services immediately but pay for the purchase over an agreed schedule (Gerrans & Lavagna-Slater, 2021). Failure to keep to the agreement by missing a payment can be costly, increasing any existing indebtedness. This form of lending draws in consumers, tempted by the immediacy of consumption, possibly accumulating substantial repayments. This type of unregulated borrowing, that is BNPL lending, we argue, plays a significant role in the normalising of consumer indebtedness (Peñaloza & Barnhart, 2011).
This accelerator study providing insight into the impact of BNPL lending hence setting the ground for a subsequent larger scale analysis into understanding consumer indebtedness during a recession, hence allowing for a more informed and focused policy formulation for government, charities and debt counselling services.