Millennials and Gen Z have a cool new way to buy stuff that would look pretty familiar to their great-great-grandparents. “Buy now, pay later” is a type of consumer credit that really got going back in the 19th century when Singer Sewing Machines sold its products for a “dollar down, dollar a week.” But the modern fintech twist in what’s known as “BNPL” is that it’s now being aimed at people making impulse purchases of fashion and other small items rather than sofas or refrigerators. It’s delivered through new apps that are wildly popular, leading to dizzying valuations of startups such as Klarna, Affirm and Afterpay. Regulators from the U.K. to Singapore are expressing worries about young borrowers getting in over their heads.
The “installment plan” is the historical precursor to today’s BNPL craze. This way of paying off purchases weekly or monthly evolved from 1840 onward, as manufacturers of furniture, pianos and farm equipment looked to make their products more attainable. The rise of the motor car in the 20th century brought installment credit further into the mainstream, though the credit card eventually became the preferred way to delay payment on smaller purchases.
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September 15, 2021 at 11:00AM
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How Old-Style Buy Now, Pay Later Became Trendy 'BNPL' - Bloomberg
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