It’s tempting for banks to dismiss the emergence of Buy Now Pay Later (BNPL) as a fad.
After all, the idea of providing consumers with credit at the point of sale (POS) is hardly new. For decades we’ve cycled between different versions — layaway, private label credit cards, POS loans — and none of them have ever substantially disrupted the status quo.
Why should BNPL be any different?
But that’s the thing about disruptive innovation: It requires more than a good idea—it requires the right conditions for that idea to take root and thrive.
And there’s reason to believe that the conditions in today’s consumer credit ecosystem are nearly perfect for the emergence and rapid growth of BNPL.