In just a few years, consumer utilization of Buy Now Pay Later has surged. According to the CFPB, BNPL originations grew more than tenfold between 2019 and 2021. Many consumers may be using BNPL without fully understanding the product. Even though BNPL lenders claim their loans are free, many borrowers end up paying late fees. BNPL services do not report repayment to credit bureaus. Most providers harvest considerable amounts of data about users and share this information with merchant partners to stimulate additional sales.

Not surprisingly, target marketing using data-driven behavioral insights and an intentionally convenient model have increased the number of people who become overextended. In claims made to its merchant partners, BNPL providers have revealed how the option of a BNPL product increases order values, conversion rates, and sales from new customers.