The Impact of Financial Innovations on the Credit Behavior of the Population Using BNPL Services

Abstract

This article is focused on the analysis of the impact of financial innovations - primarily buy-now-pay-later services (BNPL) - on the credit behaviour of the population in different countries of the world. The relevance of the research stems from the fact that that consumer demand for loans is one of the drivers of retail banking and economic activity, however, BNPL is positioned as a more 'affordable' alternative to cards and POS-credits, but in fact it can hide the risks of unaccounted debt burden. Based on statistics and industry reports, research compares the dynamics of classic consumer lending and fast-growing BNPL schemes, assesses the scale and drivers of demand, and identifies risks to household sustainability. The article combines descriptive and comparative methods to formulate practical conclusions for government, banks, fintech companies, online retailers and consumers. The results of the research are: identification of changes in consumer preferences, risks, degree of public acceptance of BNPL, global trends in BNPL regulation, and recommendations for major BNPL market players.