Buy now, pay later (BNPL) payments have exploded in popularity in the past several years, now with more than 360 million users worldwide. While BNPL offers no interest on payments made by the due date, users who fail to make payments on time can face massive fees. Further, concerns about consumer data privacy have arisen, as at least one high-profile BNPL provider has been subject to hefty fines for data privacy violations.
Despite BNPL’s already-deep market penetration, the payment method’s novelty and rapid rise have kept it largely outside the consumer credit regulatory framework thus far. Just in the past year or so, BNPL regulation has been considered on a widespread basis. Most of these regulations involve bringing the BNPL industry in line with traditional credit options. Opinions on these regulations are mixed, however: While some BNPL providers work with governments to enact these rules, others feel that regulatory measures will unnecessarily impede the industry’s rapid growth.