IDEAS home Printed from https://ideas.repec.org/p/fip/fedpcd/96954.html
   My bibliography  Save this paper

How Does Buy Now, Pay Later Affect Customers’ Credit?

Author

Listed:
  • Tom Akana
  • Valeria Zeballos Doubinko

Abstract

In this paper, we explore the relationship between consumers’ use of buy now, pay later (BNPL) and their credit reports. BNPL is a deferred payment tool that allows consumers to split transactions into four payments over six weeks. Unlike many other financial products, it is offered primarily by fintech companies and advertised to consumers as free from fees and credit checks. These providers typically do not report a consumer’s use of BNPL and subsequent repayment behavior to credit bureaus, which makes studies of BNPL users’ credit more challenging. In this analysis, however, we leverage a unique data set combining anonymized survey data and appended credit bureau data collected by the market research firm Competiscan, on behalf of the Consumer Finance Institute (CFI) of the Federal Reserve Bank of Philadelphia.

Suggested Citation

  • Tom Akana & Valeria Zeballos Doubinko, 2023. "How Does Buy Now, Pay Later Affect Customers’ Credit?," Community Affairs Discussion Paper 23-01, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpcd:96954
    DOI: 10.21799/frbp.dp.2023.01
    as

    Download full text from publisher

    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/discussion-papers/dp23-01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.21799/frbp.dp.2023.01?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    buy now; pay later; BNPL; point-of-sale payments; consumer survey; credit reporting;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedpcd:96954. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Beth Paul (email available below). General contact details of provider: https://edirc.repec.org/data/frbphus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.