The news: As buy now, pay later (BNPL) becomes more embedded in grocery and essential spending behaviors, 6 in 10 of installment users buying essentials with BNPL struggle to remember due dates for their installment plans, per a PYMNTS report.

How we got here: Access to traditional credit for working- and middle-class households shrank as banks tightened their underwriting. 

Fintech BNPL players have helped fill the gap for these boxed-out consumers. As the cost-of-living crisis deepens, those same shoppers have become more dependent on installment options to finance essential spending like groceries, bills, and rent  to make ends meet. 

Why this matters: Compared with credit cards, BNPL can be perceived as safer given their 0% interest financing pitches. However, both essential and discretionary BNPL shoppers are growing increasingly confused about tracking the dates of their installment payments. 

• Almost half (48.7%) of BNPL users financing essential purchases found themselves “usually” or “sometimes” unsure of when their next payment was due, along with over a quarter (26.2%) of discretionary BNPL spenders. 
• Over half (58.7%) of consumers using BNPL for essential spending were “usually” or “sometimes” unsure of the amount of payment they had left, compared with 30.7% of discretionary installment users.

This suggests that the perception of BNPL’s safety may evaporate: Late fees can accumulate to up to 25% of the original purchase, per CNBC, and providers may bar consumers’ future use of the platform if they miss BNPL payments. Shoppers taking out multiple loans for weekly grocery trips could easily have overlapping payments over a series of six weeks for pay-in-4 products, deepening confusion. This could place already financially fragile consumers in an even more precarious position.

Implications for payment providers: Clear signposting of payment timelines and auto-reminders sent to users’ mobile devices for payments can help alleviate loyal BNPL users’ confusion about navigating multiple payment options over the long term.