Customer Perception of Buy-Now-Pay-Later (Bnpl) Schemes and Its Impact On Retail Sales & Credit Risk

Abstract

Buy-Now-Pay-Later (BNPL) schemes have become an increasingly popular payment option in the retail sector, offering consumers the ability to purchase products immediately while paying in instalments over a short period. The growing integration of BNPL into online and offline retail platforms has significantly influenced consumer purchasing behaviour and payment preferences. This study examines customer perception of BNPL schemes and analyses their impact on retail sales performance and credit risk. The research focuses on key perceptual dimensions such as convenience, perceived affordability, ease of access, transparency of repayment terms, and trust in BNPL providers. It further explores how these perceptions affect purchase intention, impulse buying, and overall spending patterns. In addition, the study evaluates the credit risk implications of BNPL usage by examining repayment behaviour, payment delays, and the likelihood of over-borrowing among consumers. The findings indicate that favourable customer perceptions of BNPL contribute to increased retail sales by enhancing conversion rates and average order value. However, the study also reveals that excessive or uninformed use of BNPL can lead to higher credit risk, particularly in the form of missed payments and financial stress. The research highlights the importance of responsible BNPL practices, consumer awareness, and effective risk management to ensure sustainable growth for retailers and financial service providers.