LexisNexis Risk Solutions Vice President of Credit Risk Kevin King joins Wealth to discuss the rising trend of buy now, pay later (BNPL) platforms. King notes that BNPL platforms are "changing the way consumers are thinking about credit" by "creating more affordable rates" for retail purchases. However, he cautions that this approach may be "doing some harm in terms of encouraging unsustainable purchasing habits," potentially allowing consumers to "get in over their heads very quickly." LexisNexis data reveals a 20% increase in BNPL usage from November 2023 to November 2024, with the growth primarily accelerating during the Black Friday/Cyber Monday weekend. Notably, this expansion is not driven by new users, but instead by existing customers. King points out 94% of the growth comes from consumers who wanted "to find more and more ways to leverage that financial tool." "It’s clear that once consumers develop an affinity and familiarity with these tools, they’re using them again and again, retail season or not," he tells Yahoo Finance, noting that there has been a rise in grocery and auto purchases on these platforms.
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