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The use and disuse of FinTech credit: When buy-now-pay-later meets credit reporting

Author

Listed:
  • Yanfei Dong
  • Jiayin Hu
  • Yiping Huang
  • Han Qiu
  • Yingguang Zhang

Abstract

How does information sharing affect consumers' usage of FinTech credit? Using a unique dataset of "Buy Now, Pay Later (BNPL)" users from a large digital platform and exploiting a credit reporting policy change, we document that consumers significantly reduce BNPL usage when the BNPL lender becomes subject to credit reporting regulation. This reduction is particularly pronounced among borrowers with default histories, who also show improved repayment behaviors compared to those without such records. The decrease in BNPL usage also leads to a reduction in online consumption, supporting the financial constraint hypothesis. Our findings indicate that information sharing can help mitigate overborrowing and overspending, with stronger effects seen among younger borrowers, those who previously spent more, or those with credit cards. We also highlight the synergies between BNPL lending and Big Tech platforms' ecosystems, which imperfectly substitute for formal enforcement institutions.

Suggested Citation

  • Yanfei Dong & Jiayin Hu & Yiping Huang & Han Qiu & Yingguang Zhang, 2025. "The use and disuse of FinTech credit: When buy-now-pay-later meets credit reporting," BIS Working Papers 1239, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1239
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    References listed on IDEAS

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    More about this item

    Keywords

    fintech; BNPL; consumer credit; information sharing; credit reporting; overborrowing; big tech platforms;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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