Buy Now, Pay Later (BNPL) programs have expanded rapidly, driven by technological advances and restrictions imposed during the COVID-19 pandemic. Retailers promoted these deferred payment mechanisms, often interest-free, as tools to stimulate consumption. While such mechanisms can function as implicit price reductions, consumers do not always adopt them.
Recent studies have examined the growing role of deferred payment mechanisms and BNPL programs, highlighting their psychological, behavioral, and regulatory implications. Yet a gap remains regarding how product type and psychographic traits influence consumer reliance on installment payments.
This study addresses two central questions: (1) Under what conditions and for which types of purchases are consumers likely to defer or split payments? (2) What psychological, behavioral, and contextual factors drive the decision to use this method?
The research is based on two surveys, each including 430 respondents. The first was conducted in 2019, prior to COVID-19, and the second in 2023, after the pandemic. Both collected self-reported behavior regarding the use of BNPL across product categories and scenarios, including frequent low-cost purchases (food), durable goods (electronics), and recurring services (club memberships).
The findings of this study demonstrate that consumers consistently prefer fewer installments for small, frequent purchases such as food, but are more willing to defer payments when purchasing durable goods or services like electronics and club memberships involving larger total sums. In addition, path analysis conducted on the current data revealed that habitual use of deferred payments is the strongest psychographic predictor, together with income, age, overdraft status, and parental influence.
Deferred payments appear to be effective promotional tools during financial crises or periods of high interest rates. At the same time, they may encourage impulsive consumption and inequality among consumers, underscoring the importance of regulatory oversight.