Buy Now, Pay Later World: lending models and unconscious indebtedness?

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Introduction

Amid the rapid advancement of digital technologies, the globalization of commerce, and evolving consumer preferences, innovative financing mechanisms such as “buy now, pay later” (BNPL) have been gaining significant traction. This service model, frequently marketed as cost-free or offering “0% instalments,” holds particular appeal for younger generations who are accustomed to swift transactions and flexible payment options. Through BNPL, consumers can immediately finance purchases they might otherwise have been unable to afford, such as electronics, apparel, services, or luxury items.

However, beneath the veneer of convenience and simplicity, intricate ethical dilemmas inevitably surface. In contrast to traditional bank loans, BNPL services typically involve a less stringent creditworthiness evaluation, which may lead consumers enticed by attractive offers and the convenience of immediate purchase to incur debt that may prove challenging to manage. Furthermore, the absence of complete transparency regarding additional costs such as debt collection fees or punitive interest charges in case of delays, coupled with the insufficient financial literacy of consumers, may heighten the risk of descending into a debt cycle.

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