Comparative effects of BNPL loan structures

Determine whether some BNPL loan structures are better for consumers or more profitable for lenders than others, and characterize the implications of traditional lenders’ BNPL-type products.

Background

The paper distinguishes among pay-in-four loans, pay-in-30-days products, and longer-term BNPL products that may carry interest. It notes that the literature does not consistently distinguish these variants, leaving uncertainty about how product structure affects consumer welfare and lender profitability. The authors also identify limited knowledge about BNPL-type products offered by traditional lenders, beyond the cited research.

References

The literature does not always distinguish clearly between these variants, leaving open whether some BNPL loan structures are better for consumers, or more profitable to lenders, than others. Traditional lenders also increasingly offer BNPL-type products, enabling consumers to break up transactions on their credit card or their debit card, seemingly as a competitive response to BNPL’s growth (Alcazar & Bradford, 2021). However, we do not know much about these beyond the research of Donnelly et al. (2024).

— Buy Now, Pay Later: Academic Insights and Open Policy Questions  (2609.09323 - Guttman-Kenney et al., 8 Sep 2026) in Section II, “What is BNPL?”