The Consumer Finance Protection Bureau has released a report on the rapid growth of the Buy Now, Pay Later industry.
Press release: https://www.consumerfinance.gov/about-us/newsroom/cfpb-study-details-the-rapid-growth-of-buy-now-pay...
Report (PDF): https://files.consumerfinance.gov/f/documents/cfpb_buy-now-pay-later-market-trends-consumer-impacts_...
The finance news is covering this widely. Here are a few random articles, but you can easily search for one from your preferred source:
https://finance.yahoo.com/news/buy-now-pay-later-faces-151844904.html
https://www.cnbc.com/2022/09/15/cfpb-begins-crackdown-on-buy-now-pay-later-lenders.html
https://www.bloomberg.com/news/articles/2022-09-15/us-consumer-protection-regulator-takes-aim-at-buy...
The basic gist is BNPL is growing rapidly, and the CFPB is going to regulate the industry more like credit cards. Their specific concerns are inconsistent consumer protections (including "a lack of standardized cost-of-credit disclosures, minimal dispute resolution rights, a forced opt-in to autopay, and companies that assess multiple late fees on the same missed payment"), data harvesting and monetization (they're app-driven, and this affects privacy and security), and debt accumulation and overexension (most don't report to the credit bureaus, so borrowers can overextend themselves by opening many BNPL loans in a short time without lenders noticing).
Data points:
* In 2021, the 5 firms in the report made 180 million loans, totaling more than $24 billion, an almost 10x increase compared to 2019
* Most loans are between $50 to $1,000
* Apparel and beauty were 59% of loans in 2021, down from 80% in 2019
* 10.5% of borrowers were hit with a late fee in 2021, up from 7.8% in 2019
* Profit margins were 1.01% in 2021, down from 1.27% in 2020 (smaller than I expected)
