Financial literacy and Buy Now Pay Later (BNPL) use among Indonesian millennials: A narrative review

Buy Now Pay Later (BNPL), commonly known in Indonesia as paylater, has become a prominent form of digital consumer credit embedded in e-commerce, travel, ride-hailing, and lifestyle applications. For Indonesian millennials, BNPL offers convenience, payment flexibility, promotional incentives, and access to short-term credit without the procedural burden of conventional credit cards. Simultaneously, it raises concerns about impulsive consumption, repayment stress, loan stacking, and an uneven understanding of fees, penalties, data use, and credit consequences. This study examines the relationship between financial literacy and BNPL use among Indonesian millennials through an IMRAD-based narrative review. The synthesis draws on official Indonesian demographic, financial literacy, regulatory, and BNPL market data, together with recent literature on digital financial literacy, consumer credit, financial management behavior, and responsible BNPL use. The review suggests that financial literacy is necessary but insufficient for responsible BNPL behavior. General financial knowledge may improve budgeting, cost recognition, and risk perception; however, BNPL decisions are also shaped by platform design, promotional framing, perceived behavioral control, social influence, and self-control. This study proposes an integrative framework in which financial literacy affects BNPL outcomes through digital financial literacy, risk perception, budgeting behavior, understanding of terms, and repayment discipline. Regulation, disclosure quality, and ethical platform design are essential complements to consumer capabilities. This study contributes to business management scholarship by connecting fintech adoption, consumer behavior, financial well-being, and responsible digital finance in an emerging market context.