Gen Z’s Love-Hate Relationship with BNPL

Why pay now when you could pay later? This is the logic Apple Pay is bringing to users through the launch of Buy Now, Pay Later (BNPL). Let’s break down what the f*ck this launch means to Gen Z.  

The looming threat of recession hasn’t stopped Apple from leveling up their financial services. According to NerdWallet, BNPL, “​like its name suggests, ‘buy now, pay later’ lets you make a purchase and receive it immediately but pay for it at a later time, usually over a series of installments.” Pretty simple, right?? The service exploded with pandemic-induced online shopping. Some of these installments can come with an interest or late fees depending on the number of installments. 

You can still be eligible for BNPL services if you have a bad or no credit history, a potential advantage for up-and-coming consumers still figuring out their financial portfolios. With this option, Gen Z can now use methods of purchasing like BNPL to alleviate the instant financial pressure of a big purchase. 

The hashtag #buynowpaylater has around 75 million views on TikTok, some being paid ads. Some are calling it a blessing, and some are calling it a curse. Scott Galloway, a marketing professor at NYU, called BNPL “the equivalent of the subprime mortgage crisis” for millennials and Gen Z in a Pivot podcast episode because of how it tricks people into buying things that they cannot afford. There are even TikToks about how people cannot afford the installments anymore, in a humorous way

According to a survey conducted by Piplsay, 43 percent of Gen Zers have missed at least one payment in 2021. Another study done by Qualtrics for Credit Karma says that number for both millennials and Gen Z is more than 50 percent. At JUV, we wanted to test these numbers with our own research through our Receipt network, made up of 5,000+ engaged Gen Z’ers from around the world. Our Director of Research, Steph Strickland, helped compile insights from our proprietary research, and here’s what we found. 

TLDR: It is undeniable that there are some risks with using BNPL products such as Klarna, Affirm, Afterpay. It is also undeniable that these past months were difficult for BNPL players, however, as CB Insights CEO Anand Sanwal recently wrote in his daily newsletter: “BNPL ain’t dead.”

BNPLempowers Gen Zers financially. There are a lot of us who have never used a credit card before, let alone that some of our international friends studying abroad are not even eligible for a credit card outside their home country. BNPL helps with financing as long as I know how to use it correctly.

And that’s where the problem starts. These products are innately empowering customers, however, there is a lack of awareness, transparency, and education around it, just as our insights concluded. Elle, in their article on BNPL, claimed that such installments can be used for two different purchases: “1) to purchase necessities, and 2) to buy non-essential items that help them maintain social status and clout, despite not having the means to pay for them.” 

So, instead of positioning themselves as an installment service with no questions asked, BNPL brands should be a partner for Gen Z in financial literacy. BNPL products need to meet Gen Z where they are with full transparency. 

Written By Emir Lise, Co- Authored By Steph Strickland

Emir Lise

Emir is the 21-year-old Associate Director of Growth at JUV, a Gen Z marketing agency that is dedicated to empowering youth and diverse voices through partnering with brands. He is currently a student at New York University, majoring in Data Science and minoring in both Business and Innovation & Creativity. Born & raised in Turkey, his aspirations of living in a fast-paced city made him move out at the age of 14 to Istanbul. Desiring more energy, he moved to New York (where JUV’s HQ is at) in Fall 2021.

Other than the work and school, Emir is a research assistant focusing on innovative start-ups in international markets and business strategies to transcend trade-offs. Emir also takes several leadership and membership positions in consulting and entrepreneurship clubs at NYU. Before joining JUV, Emir worked at a digital transformation consulting firm as a Junior Consultant as well as a Transformation Analyst at one of the fastest growing tech companies in the world. His previous work experience in the intersection of tech, innovation, and research revealed his passion for growth hacking, and constantly improving things (yes, everything).

Steph Strickland

Steph Strickland is the Director of Research at JUV Consulting and currently lives in Boston, Massachusetts. At the age of 22 (aka her Taylor Swift year), she is working toward her Master’s in Media Science from Boston University. Steph is known for getting way too excited about well-organized spreadsheets (…it’s just so satisfying…) and will use her inquisitive nature to incorrectly guess your zodiac sign. Her favorite part of the job is connecting the science of data with the art of storytelling to spark something transformational.

In her previous experience, Steph has collaborated with brands including Coca-Cola, Hyundai, and Adobe Creative Cloud to create impactful brand and campaign strategies. She also led an extensive public health campaign related to COVID-19, where her findings in the City of Gainesville were shared across the country to other college towns. Prior to working in agency settings, Steph produced content for several publications as a writer and photographer. Even today, you can find her moonlighting as a writer for magazines and digital publications.