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The convenience of buy now, pay later creates risks: Fitch

BNPL providers are rushing to the U.S. market as brands and retailers build the option into shopping experiences. The domestic market is still seen as relatively new by international players, making it a frontier for potential growth. Just this week, Square announced plans to buy the Australian BNPL player Afterpay for $29 billion.

But with opportunities come risks, heightened by the fact that many product areas of BNPL are relatively unregulated compared to other forms of consumer credit. And while the costs tend to be low, the underwriting process is typically “very fast” and based on “‘soft’ credit checks” rather than more thorough vetting required in other forms of credit, Fitch analysts said.

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