'Buy Now, Pay Later' is Expanding Fast, and That Should Worry Everyone (techcrunch.com)
- Reference: 0180109537
- News link: https://news.slashdot.org/story/25/11/17/1851247/buy-now-pay-later-is-expanding-fast-and-that-should-worry-everyone
- Source link: https://techcrunch.com/2025/11/16/bnpl-is-expanding-fast-and-that-should-worry-everyone/
> When Nigel Morris tells you he's worried about the economy, you listen. As industry observers know, Morris co-founded Capital One and pioneered lending to subprime borrowers, building an empire on understanding exactly how much financial stress the average American can handle. Now, as an early investor in Klarna and other buy-now-pay-later companies like Aplazo in Mexico, he's watching something that [1]makes him deeply uncomfortable .
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> "To see that people are using [BNPL services] to buy something as basic and fundamental as groceries," Morris told me on stage at Web Summit in Lisbon this week, "I think is a pretty clear indication that a lot of people are struggling." The statistics back up his unease. Buy-now-pay-later services have exploded to 91.5 million users in the United States, according to the financial services firm Empower, with 25% using the services to finance their groceries as of earlier this year, according to survey data released in late October by lending marketplace Lending Tree.
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> These aren't discretionary purchases -- the designer bags and latest Apple headphones that BNPL was marketed for originally. Borrowers aren't paying it all back, either. According to Lending Tree, default rates are accelerating: 42% of BNPL users made at least one late payment in 2025, up from 39% in 2024 and 34% in 2023.
[1] https://techcrunch.com/2025/11/16/bnpl-is-expanding-fast-and-that-should-worry-everyone/
Make Money Fast! (Score:2)
The only thing I care about is how I can make money on this. Because we all know money is to be made. Default rates at 42%? Nah, there is some way we can *still* make money out of this. We just need to scrape and scrounge around to ensure we make a profit. Who cares who hit hurts or who is impacted. We can still .. still make money here. You all with me? Yes!
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Fair.
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If the article is correct, the way to make money is to figure out when this is going to catch up with the BNPL companies and then short them. Good luck timing it.
That 42% late payment rate, though, is likely more a feature than a bug. Late payments mean more fees.
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The way to make money on it is to buy stock in those companies. Or stock in their customers, who are selling more stuff.
If you manage to get the timing anywhere close to right you can sell that stock and then buy real estate at foreclosure sales.
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> The only thing I care about is how I can make money on this.
How can you make money on people defaulting on their bills?
Flip foreclosures.
Flipping high value items people list cheaply on Facebook Market out of desperation.
Open your own pawn shop / "we buy gold" business.
Get a job as a debt collector.
Become a repo man.
Write a "How to Survive Crippling Debt" book.
Re: Make Money Fast! (Score:1)
Don't forget lobbying and consulting.
Loan sharking.
Underground gambling.
Nah (Score:2)
> "To see that people are using [BNPL services] to buy something as basic and fundamental as groceries," Morris told me on stage at Web Summit in Lisbon this week, "I think is a pretty clear indication that a lot of people are struggling."
I have used Klarna invoice to buy take-away many times when I've been hungry as hell because it's the quickest way to check out. I am definitely not struggling economically.
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Quicker than Apple or Google Pay?
BNPL groceries = groceries on credit cards (Score:2)
People buying essentials on credit has been around for a very long time.
It's never a place you want to be, but it beats starving or freezing to death.
Re:BNPL groceries = groceries on credit cards (Score:4, Insightful)
I assume you mean buying groceries using credit cards and not paying off the balance in full thus paying interest. Personally, I buy everything including groceries using a credit card (via Apple Pay) and always pay off the balance in full. It's easier than dealing with cash and coins.
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Pretty much yes.
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or use a debit card
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Fuck debit cards. A: no rewards. My current card pays a % of purchases back as cash. I'd literally be losing money if I swapped to a debit card. B: if the card number is stolen (and let's face it this day and age it will be at some point) it's MY money being stolen not the bank's. If you have a good bank they will fix it quickly but it's still a lot more hassle that if it happens with a credit card. If you have the means and discipline to pay it off every month, credit card is the way to go. Bonus: the card
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Ther is this thing called debit carsd, no monthly bill to remember and no innterest if you forget ( obviously) and you are nor writteb up for having access to a line of credid(this might just be a thing here in Norway, but yea if you want a mortage and have a stacbk of vvs even if you have no balance on any of them)
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In the US at least, showing that you accrue temporary debt and pay it off improves your credit score.
Re: BNPL groceries = groceries on credit cards (Score:2)
My local supermarkets, at least the ones where I shop, don't allow purchases with credit. This is irritating AF even though I have the money in the bank because I get a percentage back.
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> This is irritating AF even though I have the money in the bank because I get a percentage back.
The percentage you get back is a small part of what goes into the costs that the credit card industry charges consumers and merchants .
If no credit cards offered any kinds of rewards, the credit card companies could lower consumer and merchant fees and interest rates and still make the same amount of money.
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> My local supermarkets, at least the ones where I shop, don't allow purchases with credit.
For a lot of Americans, "local supermarket" means Walmart, and they take everything.
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There's apparently only one large American supermarket chain that DOESN'T take credit cards, WinCo.
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> or freezing to death.
See, what you do is put your [1]Bitcoin heater [slashdot.org] on credit, then use the Bitcoin it mines to buy the groceries.
[2]Obligatory meme image. [wikipedia.org]
[1] https://news.slashdot.org/story/25/11/16/2339215/some-americans-are-trying-to-heat-their-homes-with-bitcoin-mining
[2] https://en.wikipedia.org/wiki/Roll_Safe#/media/File:Roll_Safe_meme.jpg
Re:BNPL groceries = groceries on credit cards (Score:4)
I'd love to see what else is on the CC bills for people that are buying essentials on credit. I'm not trying to deflect from a very real issue but more information is needed to paint the true picture.
I know a number of people under water with CC debt and are charging their groceries. I want to feel bad for them but then they are also charging starbucks 6 days a week, gas for their trucks, 4-5 streaming services, and also door dash a couple of days a week. Toss in a new iPhone/airpods/tablet throughout the year. They blame their CC bills being high on car repairs and refuse to acknowledge that they're dieing the death by a thousand cuts.
It sucks that people like this are more common than not because they're eclipsing the faction of people that are legit screwed and are in an awful situation like this.
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> It sucks that people like this are more common than not because they're eclipsing the faction of people that are legit screwed and are in an awful situation like this.
Social media amplifies anecdotes about people being bad with their money, giving the impression that they're eclipsing those who are genuinely struggling due to low income, but the numbers don't lie. Half of all income earners bring home less than the US median income, which is what makes it the median income.
Article mentions no useful details (Score:3)
The article (as far as I can tell) provides no breakdown on who is using BNPL. Nothing about age, gender, level of education, region, etc.
The quote about "using this for groceries" seems to come from self-reported surveys. (Whereas these companies should have exact insight into what the loans are actually financing, so there should be no reason for surveys). People might be self-reporting groceries because they don't want to admit using it to pay for inessential items.
I wonder if this is being driven by YOLO youthful idiocy, not realizing that these loans will have to be paid back OR they will suffer credit issues down the line when financing a house or car. But this article is extremely light on any type of useful details beyond that headline number of 91.5 million in the USA. That seems pretty insane as that is 1 in 4 people in the USA.
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at the grocery store i see a LOT of under-35s using all kinds of weird cards to pay.
i've used only my bank debit card in the past 20 years for groceries
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The people using this service already have credit issues. Hence the massive interest rates.
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Most of these monthly payments don't charge interest they get their money from the stores similar to how credit cards work. However instead of a 3-4% back from the stores they are getting 6%+.
Stores are will to pay that extra amount because people who use these will purchase more items, and these monthly payment programs don't have the legal protections that credit card provide so as an example there is no charge back capability.
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I think it's a good key indicator to include in evaluating the health of the lived economy (not the stock market). Here's what I watch:
1. Credit card delinquency (https://fred.stlouisfed.org/series/DRCCLACBS_
2. Sub-prime car loan delinquency (https://www.marketplace.org/story/2025/11/12/a-record-number-of-americans-are-behind-on-their-auto-loans)
2. BNPL companies like Klarna not meeting earnings expectations from their PRIMARY business (as opposed to propping up the business with speculative investment). In
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> I wonder if this is being driven by YOLO youthful idiocy, not realizing that these loans will have to be paid back OR they will suffer credit issues down the line when financing a house or car.
Instead of complaining that youth are idiots because they don't understand finances, let's recognize it for what it is. They are financially ignorant . Ignorant because finance is not a part of education any more (if it ever was). The generation now entering adulthood comes from financially illiterate parents, so they're even more screwed. Not because they're stupid, just ignorant. And make no mistake that's exactly how our corporate overlords want it to be.
Ordinarily we get 8 years of democrat rule (Score:2)
To fix the problems Republicans inevitably cause with their trickled down lies and idiot moral panics.
We didn't get that this time. And we've had 60 years of right wingers sabotaging the economy.
The coming crash is going to be brutal and I don't think we can do anything about it.
The only possible fix would be to give the Democrats a super majority in the Senate during the midterm elections so they could completely undo and course correct decades of economic mismanagement and sabotage from Repub
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> By 2028 many of the people here reading this will be homeless.
I think this would hit a lot harder on Reddit. Slashdot is full of us olds who have lived through the Great Recession and look at Trump's economic fuckery like Florida Man would an approaching hurricane. "Bring it bitch, we've seen worse."
I strongly agree with the premise, however (Score:2)
I wouldn't think a late payment should count as a default. That last part sounds like trying to shove the data into your pre-assumed narrative.
Tell us how many people ended up not paying the money back, one way or the other.
We've seen this pattern before. (Score:3)
The last great recession was due to precisely this sort of spending pattern plus a collapse in payment. Banks may be healthy, for now, but they can't keep lending forever with no recover. This is not a good sign.
Re: We've seen this pattern before. (Score:2)
Yes they can. We will just bail them out again⦠wish I was joking.
Re:We've seen this pattern before. (Score:4, Interesting)
That's only very partially true. The uptick in unpaid mortgages gave the house of cards a little tap; but it was the giant pile of increasingly exotic leverage constructed on top of the relatively boring retail debt that actually gave the situation enough punch to be systemically dangerous; along with the elaborate securitizing, slicing, and trading making it comparatively cumbersome for people to just renegotiate a mortgage headed toward delinquency and take a relatively controlled writedown; rather than just triggering a repossession that left them with a bunch of real estate they weren't well equipped to sell.
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^^^^^^this, 1000%