Understanding the psychological determinants of buy-now-pay-later (BNPL) in the UK: a user perspective

Abstract

Purpose

This study explores the psychological determinants of buy-now-pay-later (BNPL) use in the UK and reviews the efficacy of existing payment constructs.

Design/methodology/approach

A total of 533 BNPL users engaged in story stem completion. Template analysis was used, supported by the identification of four BNPL sentiment groups to enable comparison.

Findings

Whilst positive attitudes towards BNPL dominate, other psychological determinants are apparent to a varied extent. Psychological distance and ownership of borrowed money are redolent, while transparency and transaction convenience are less appreciable. BNPL users understand temporality beyond its current conceptualizations. Some users construe BNPL as a “savings” product, and hence payment format conceptualizations may be erroneous. Those with a positive sentiment foreground BNPL’s consumption and budget management benefits. However, the potential for unintended consequences is manifest across all users.

Research limitations/implications

The potentially unwanted consequences, or dark side, of BNPL use in the UK are highlighted. The specified constructs, whilst helpful, do not particularize the complex interconnected nature of the psychological determinants of BNPL use. Improved conceptualization offering richness and clarity is needed – temporality specifically requires consideration.

Practical implications

Users’ sophistication and misunderstanding are both evident, necessitating fuller conversations among various stakeholders, including, providers, policymakers, consumers and advocacy groups.

Originality/value

This research advances the scarce literature exploring consumers’ BNPL use determinants and challenges current conceptualizations surrounding payment format perceptions.

Citation

Relja, R., Ward, P. and Zhao, A.L. (2024), "Understanding the psychological determinants of buy-now-pay-later (BNPL) in the UK: a user perspective", International Journal of Bank Marketing, Vol. 42 No. 1, pp. 7-37. https://doi.org/10.1108/IJBM-07-2022-0324