From marketplaces such as Amazon and eBay, to electronics brands like Apple and Curry’s, more and more brands are accepting buy now pay later (BNPL) as a payment method. The allure for consumers is evident: the payment method (used to process over two billion transactions in 2023, according to GlobalData) allows customers to purchase an item now while deferring all or some of the payment to a later date. This is usually done with minimal credit checks, providing consumers with a convenient way of assuaging their desires while possibly succumbing to debt.

Statistics regarding BNPL use also shed light on a greater, underlying issue. While it may seem that BNPL is used only for wants, rather, than needs, a 2023 study by Money & Pensions Service found that 20% of BNPL customers use the method for essential goods such as groceries or household bills. This highlights the severity of the cost-of-living crisis, as more and more consumers fall prey to the subtle and silent creep of BNPL.

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Onus is not on brands as that would also place an onus to not accept credit cards

Many countries have sought to regulate BNPL— both Australia and the UK have begun to bring the payment method under the regulatory remit of financial bodies or acts. In May 2024, the US ruled that BNPL should be governed by the same consumer protection laws as credit cards, placing a greater onus on BNPL providers to have a duty of care to their customers. However, the method is still largely unregulated in many parts of the world.

Another way to pay

There are, however, alternatives to using BNPL as a payment method. You’re about to click ‘Purchase’—only a fraction of the price tag will leave your account today. You’ll look glamorous at the event and won’t have to worry about paying off the dress in full for a few weeks. But something stops you. Suddenly, a light bulb goes off! What was it called? You scramble to another tab and your fingers fumble over the keys: ‘renting designer dresses online’, you hastily type into Google. Memories of a conversation you had with a colleague drift through your mind—she had rented a rather expensive dress for a friend’s wedding for the cost of a large pizza.

That’s it! The first result on Google rings a bell and you click on the site. Please, please, your eyes dart up in a praying motion. You type the name of the dress into the website’s search bar….and….please, please….there! There it is! Your shoulders slump in relief. For the price of a pizza (plus a canned drink). Manageable. Doable. Very, very, doable!

You order the dress, your bank account is happy, and that evening you fall asleep to the fantasies of walking into that ballroom…glammed, glitzed, and with enough money to guiltlessly treat yourself to an Uber home should that champagne be a bit too tempting.

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Aisha U-K Umaru is an Analyst, Thematic Intelligence, at GlobalData