Buy now, pay later services expanded into groceries and utility bills. Rent too. The phrase for this used to be "I don't have any f*cking money." Now it's innovation.
Someone looked at a payment model designed for impulse purchases and thought the next logical step was essentials. Food. Heat. Shelter. The stuff you need to not die. Klarna for your gas bill. Affirm for your eggs. Four easy payments on the thing keeping your lights on.
Late payments are climbing. Of course they are. The person splitting their grocery bill into installments wasn't flush with cash to begin with. They were broke then. They're still broke now. Except now they're broke with a payment plan on last week's chicken.
This is not a liquidity problem. This is not a cash flow optimization strategy. This is poverty with a fintech interface. But we can't call it that because poverty doesn't have a Series B.
The risk here isn't that BNPL expands into essentials. It already did. The risk is that we pretend this is anything other than what it is. A credit card for people who can't get credit cards. A payday loan in a clean sans-serif font.
Retailers love it. Conversion rates spike when you hide the part where money leaves your account. BNPL providers love it. They collect fees and interest dressed up as convenience. The only person who doesn't love it is the one making four payments on bread.
Late fees are piling up on groceries people already ate. The chicken is gone. The debt remains. This is the financial system working exactly as intended. Extract from those who have nothing left to extract from, then charge them extra for the privilege.
Photo by Claudio Schwarz on Unsplash
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