Macro conditions represent an at-times indecipherable combination of tailwinds and headwinds for consumers using buy now, pay later (BNPL) products. On the one hand, consumers face inflation, dwindling savings, and growing debt. On the other hand, consumer spending remains at high levels, fueling a strong US economy in Q3. 

In part, products like BNPL are a mechanism for consumers to skirt around traditional barriers to overspending—flying over the headwinds, while adding fuel to tailwinds. That is, consumers can often assume more debt, and even default on BNPL payments, without adversely affecting their credit scores or other established markers of financial health. Granted, some BNPL players are now participating in credit reporting schemes, which has also helped consumers with low credit scores improve their metrics.

But BNPL still functions as a stopgap measure for consumers, and a pressure valve for macroeconomic trends that face some sort of expiration date. 

This is in a state of change, however, as BNPL platforms shift away from functioning as a standalone payments solution toward offering marketplaces of their own. 

Research by PYMNTS suggests that 80% of BNPL users start their purchasing journeys on BNPL websites. This is helpful for retailers, who can offer standalone offers and products to a specific subset of consumers. It also may create user dependence on BNPL solutions for everyday purchases, generating tranches of consumers who grow accustomed to paying in installments for more than just large purchases.

Even as the BNPL generates less buzz in the wake of down rounds and downsizing, fintechs should begin to anticipate how a dedicated slice of consumers adopting consumer practices in BNPL providers’ image may affect the kinds of products they can sell. Not just credit cards, but also personal financial management solutions, traditional loans, and more.