Easy Payments, Hard Consequences: The Behavioral and Financial Effects of Buy Now, Pay Later in Pakistan

Abstract

The present study aims to understand the impact of Buy Now Pay Later (BNPL) programs on the consumer spending patterns of individuals in Pakistan, and especially on impulse buying, how individuals perceive the cost of products, and their overall financial well-being. The sample of BNPL users that took part in the survey amounts to 385 active individuals, and the data were processed with the help of structural equation modeling. The outcomes are clear in that BNPL options result in a much greater level of impulse buying and a perception of products becoming much cheaper at the time of purchase. Simultaneously, excessive dependency on such services was discovered to negatively affect the overall financial situation of the users. These lessons are extremely useful to consumers themselves, fintech firms and regulators who are currently struggling with the sudden proliferation of deferred-payment services in the Pakistani financial industry.