Nearly every online purchase these days is accompanied by an offer to “BNPL”: buy now, pay later. The video below looks at how companies like Affirm and Klarna are making a fortune on interest free loans while consumer watchdogs warn about the potential dangers of BNPL both to consumers and providers.
Questions:
- How do BNPL companies like Affirm and Klarna make money on their interest free loans?
- Why do you think consumers with subprime credit scores are more likely to use BNPL services? What risks does this present both to consumers and providers?