Buy Now, Pay Later: A Boon or Burden? Exploring BNPL’s Influence on Consumer Spending Behavior in Marginalized Communities

Abstract

The emergence of Buy Now, Pay Later (BNPL) services has transformed the digital retail and credit landscape, particularly among marginalized communities with limited access to formal banking systems. This study investigates the behavioral and financial implications of BNPL usage among 500 respondents from rural, low-income, and underserved populations in India. Employing a mixed-methods approach—comprising descriptive statistics, regression analysis, t-tests, correlation, and ANOVA using SPSS and Excel—the research explores how BNPL influences impulsive buying, debt accumulation, and financial literacy.Findings reveal that while BNPL enhances short-term purchasing power and access to aspirational goods, it also contributes significantly to impulsive spending, poor financial discipline, and rising debt levels. Respondents with lower financial literacy were more likely to misunderstand payment terms and fall into repayment traps. Regression analysis highlighted that usage frequency and impulsive buying were stronger predictors of debt accumulation than income level. ANOVA results showed statistically significant differences in BNPL impact across income and education groups.The psychological appeal of deferred payments, coupled with aggressive marketing and lack of consumer awareness, has created a cycle of recurring debt for many users. While BNPL holds potential for financial inclusion, its unregulated growth may pose long-term financial risks. The study recommends policy interventions focused on financial literacy, transparency in lending practices, and consumer protection frameworks to ensure responsible usage.