Buy Now, Pay Later: Survey Evidence of Consumer Adoption and Attitudes

In 2019, we began to see the rise of a newer form of deferred payment tool, primarily in online stores; these products allowed customers to make a purchase while splitting the transaction into four payments over six weeks and became known as buy now, pay later (BNPL). Marketed primarily by fintech companies, the products advertised no fees or interest and no credit checks. Since then, the segment has grown dramatically, and with that growth has come increased scrutiny from regulators, traditional banks, and consumer advocates. In this paper, we report on the results from a survey of 2,070 U.S. consumers conducted by the Consumer Finance Institute at the Federal Reserve Bank of Philadelphia to gain insight into BNPL use. We note that the adoption of BNPL among our respondents appears to be largely experimental, with most users reporting three or fewer uses over the previous 12 months. We also find that, contrary to the assumptions of most observers, BNPL users did not cite lack of credit access as a primary reason for choosing BNPL as a payment option.