Buy Now, Pay Later (BNPL) services offer consumers the option of making retail purchases using short-term, interest-free loans. BNPL products are defined by the Consumer Financial Protection Bureau (CFPB) as installment loans – typically one down payment followed by three installment payments – for the purchase of goods and services, which retailers may offer as a payment option (CFPB, 2024b). In place of charging interest on their loans, BNPL providers typically charge fees for late or missed payments and charge a fee to retailers for each purchase, similar to retailer credit card fees (CFPB, 2024a). Afterpay, Affirm, and Klarna are among the first providers of BNPL (Clere, 2023). _x000D_ Initially, these products featured predominantly on online retail fashion and electronic stores. However, in recent years, BNPL has experienced rapid expansion and adoption by both consumers and merchants alike (Alcazar & Bradford, 2021). Major retailers like Walmart, Kroger, and Target now offer BNPL as a payment option for purchases made both online and in-store (Sezzle, 2024; Target, 2024; Walmart, 2024). Beyond retailers, banks have also begun incorporating BNPL features into their credit cards for large purchases (Alcazar & Bradford, 2021). For some low-wage cash-strapped workers, this product may present a timely alternative to address their needs.
