The Relationship Between Consumer Perceptions and Use of Buy Now Pay Later (BNPL) Products

Abstract

This paper examines the relationship between consumers' perceptions of Buy Now Pay Later (BNPL) products and their subsequent usage patterns. Based on the literature on consumer perceptions, marketing strategies and financial product promotions, this study employs dual information processing theory as a lens for understanding how perceptions drive adoption and use of BNPL services. I employ ordered logistic regressions to analyse responses from a survey of young consumers aged 18-34 in New Zealand conducted by Qualtrics to assess the impact of consumer perceptions of BNPL across multiple aspects on frequency of use, whether consumers borrow to repay BNPL, and frequency of incurring late fees.

The main findings suggest that marketing strategies significantly influence consumers' perceptions of BNPL, which in turn significantly affects their usage behaviour. Specifically, consumer acceptance of the attractive features of BNPL appears to mask the financial risks involved, relating to greater use and use consistent with impulse purchasing and possible subsequent debt accumulation. I also discuss regulatory challenges in the fast-growing BNPL market and the need for stronger consumer protection, explaining the psychological allure of BNPL products and their impact on consumers' financial well-being.