How Did We Get Here? Let’s set the scene: the year is 2020. We’re in the middle of an unprecedented global pandemic. Businesses are shutting down, people are out of work, and financial anxiety is through the roof. Workers worldwide will go on to lose a grand total of $3.7 trillion dollars in earnings during the pandemic, affecting consumers’ ability to afford basic living expenses, let alone retail purchases. In what seems like an overnight rise into the spotlight, Buy Now, Pay Later (BNPL) offers a new take on an old idea: breaking transactions into smaller, more affordable payments through point-of-sale (POS) microloans. Similar to the classic department store layaway plans, you pay in installments until the full balance is paid. No need for a credit check and no interest accrued. But unlike layaway, you receive the item before it’s paid off. With households’ cash flow greatly reduced, BNPL seems like a miracle solution to keep the economy running without forcing families to take on debt. Growth skyrockets. BNPL unicorns are born in rapid succession.
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