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What influences demand for Buy Now, Pay Later credit?

Author

Listed:
  • Chen, Tao
  • Marshall, Ben R.
  • Nguyen, Nhut H.
  • Visaltanachoti, Nuttawat

Abstract

We investigate the determinants of demand for Buy Now, Pay Later (BNPL) credit using a comprehensive database from New Zealand. We consider both absolute demand and relative to total personal lending demand. The results indicate that BNPL is more popular with single individuals, younger people, and those on lower incomes. There is a negative relation between absolute and relative BNPL demand and interest rates. BNPL demand was reduced during the period around responsible lending legislation changes, even though these were not specifically related to BNPL, while demand increased following the end of COVID-19 lockdowns.

Suggested Citation

  • Chen, Tao & Marshall, Ben R. & Nguyen, Nhut H. & Visaltanachoti, Nuttawat, 2024. "What influences demand for Buy Now, Pay Later credit?," Economics Letters, Elsevier, vol. 242(C).
    • Handle: RePEc:eee:ecolet:v:242:y:2024:i:c:s0165176524003410
    DOI: 10.1016/j.econlet.2024.111857
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    References listed on IDEAS

    as
    1. Guttman-Kenney, Benedict & Firth, Chris & Gathergood, John, 2023. "Buy now, pay later (BNPL) ...on your credit card," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    2. Semyon Malamud & Neng Wang & Yuan Zhang, 2022. "Asset Pricing with “Buy Now, Pay Later”," Swiss Finance Institute Research Paper Series 22-85, Swiss Finance Institute.
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    Cited by:

    1. Joselito S. Malaluan. & Kristel G. Aclan & Mike Lester M. Aranas & Jennilyn M. Plandez, 2025. "Influence of Buy Now, Pay Later on Buying Decision among Teaching and Non – Teaching Staff on Batangas State University – TNEU Pablo Borbon," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(15), pages 347-366, March.
    2. Vijay Amrit Raj & Alok Kumar Rai, 2025. "Why stay loyal? Exploring the role of consumption values, satisfaction, and alternative attractiveness in buy now pay later services," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 30(2), pages 1-15, June.

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    Keywords

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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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