https://www.nytimes.com/2022/08/29/dining/buy-now-pay-later-loans-groceries.html
It's paywalled, so here's a short summary:
The article says that the buy now, pay later services, which started to proliferate about 10 years ago, and were originally used for one-shot discretionary purchases like concert tickets or fashionable clothing, are increasingly being used for essentials and everyday expenses like groceries and restaurant meals. This is pushing people into debt, particularly younger people who are not financially literate. Criticizes the BNPL industry for targeting the vulnerable and obscuring costs/terms. Says the industry is relatively lightly regulated, and cites Consumer Reports who says these companies are designed to circumvent the Truth in Lending Act. Blames their use in this manner on a weak social safety net, like food stamps being cut back.
Specific DPs:
* Zip reports a 95% growth in US groceries purchases, and 64% at restaurants
* Klarna reports over half the top 100 items being purchased from major retailers are groceries or household items
* Zilch says 38% of its transactions are groceries or restaurants
* Mentions that total BNPL transactions across the industry have risen from $15.3 billion in 2020 to $45.9 billion in 2021
* A report from Fitch Ratings says 41% of BNPL users have poor credit history, and they have more debt than average
* Fitch report also says delinquency rates for some BNPL services have doubled from June 2021 to March 2022 (Afterpay: 1.7% to 4.1%), while delinquency rates for credit cards haven't really changed (~1.4%)
* The CFPB opened an inquiry into the practices of 5 BNPL companies, in December
13Oct22 Exp F8: 812