The BNPL trend has spawned companies with huge valuations, like Klarna ($46 billion) and AfterPay, which Square will buy in a $29 billion deal.
Many younger consumers say they use buy now pay later because they want new clothing or electronics and don't have the money, said Joseph Flowers, a full-time content creator. The 22-year-old regularly updates his wardrobe for his social media videos and uses Afterpay when a bill tops $300.
Breaking up costs because it "feels smaller" is not uncommon among younger generations, who struggle to think about or plan for the future, said Sarah Newcomb, a behavioral economist at financial services firm Morningstar. In the U.S., consumers focus on material goods rather than saving, a problem that social media is amplifying, she added.
Eighteen-year-old Ogbonna typically uses Klarna for clothing company Shein purchases over $100 because four payments of $25 "sounds cheaper even though it's not," she said. At least four of those interviewed echoed that sentiment.
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