Buy Now, Pay Later (BNPL) is the way that Generation Z and, to a slightly less extent, Millenials, now like to pay for goods and services, which sounds great but sends goose bumps up your arms just thinking about the downside.
The Buy Now, Pay Later trend is not new; what is new is the mechanisms that big brands are now marketing to attract Gen Z and Millenials to their online stores.
The new version is attractive because it is interest free.
While both Gen Z and Millenials struggle to keep their credit card debt under control at a time when all the plans for repaying student loans and getting on the career ladder have been properly screwed, er, disrupted, it seems the perfect solution.
Yet the BNPL approach will always push seasoned debt carriers into the cynical zone.
We all know that 99.9% of all terms and conditions are not read. But we lie and click accept and carry on into an unknown world of potential penalties and pain.
We also know of companies without scruple, who offer short term loans at Mafia rates of interest, with penalties that include buying your own concrete block and taking your own taxi to a secluded part of the docks.
And you cannot help but wonder how effective the protections are for Gen Z and Millennials.
Regulators worldwide have moved to stop these practices, and some of the more unscrupulous have been closed down for charging over 1,000% interest, with no room to manoeuvre.
Gen Z and Millenials fall nicely into a category targeted by BNPL schemes. They have while trying not to, racked up literally trillions of dollars of debt on credit cards, according to the US Fed, so what else can they do when faced with an interest-free scheme that lets them buy now, pay later?
For sure, there must be protections; otherwise, we will hear many stories of young people getting into poor mental health territory when faced with threats from the unscrupulous companies citing page 34, paragraph 5 of their Ts & Cs and demanding immediate repayment.
The answer is simplicity. The leaders in the new version of Buy Now, Pay Later schemes are keeping the Ts & Cs to a minimum and keeping things crystal clear. Let us hope that other brands evaluating this approach follow their example and keep Gen Z and Millennials safe.
In fact, let us hope that all online stores, services and products follow their example. That way, we may even end up with Ts & Cs that we actually read and understand.