With the BuyNowPayLater those with less repayment capacity take on more debt

While at the end of 2022, in line with the findings of the Politecnico di Milano and Crif, Bnpl was used more frequently by households that do not have difficulty reaching the end of the month with their perceived salary, on the other hand, the survey conducted in 2025 shows widespread use among households with limited income, who have difficulty reaching the end of the month with their perceived income or who have few assets. Bnpl use is more frequent among households that have debt for consumption purposes, in particular by households that use credit cards with instalment repayment and/or among households that have several debts, in particular loans to obtain liquidity or to consolidate other debts, and among those who are behind in repaying instalments.

In short, incompared to the free service for the consumer (no interest and/or costs, with the exception of penalties for late repayments) and the rapidity of the procedure thanks to a simplified assessment of creditworthiness, however, the Bnpl may prove risky for those who resort to it as it may increase their level of indebtedness.

In a Bnpl transaction there are three parties: the supplier of goods or service provider ('seller'), the consumer and the financial intermediary. The latter may grant deferred payment to the consumer; alternatively, deferred payment is granted directly by the seller, who then assigns the credit to the financial intermediary. The seller pays a commission to the intermediary, who assumes the credit risk; in return, he may obtain an increase in turnover either through an increase in average expenditure or through a broadening of the customer base.

According to Banca d'Italia, the commissions paid by sellers in the Emea area (Europe, Middle East and Africa) are just under 3%, definitely higher than those on credit cards (less than 0.5%); in the United States, commissions are close to 5% compared to just over 2% of transactions settled with credit cards. According to a survey conducted by the Bank of Italy among some Bnpl operators, the level of commissions varies between 1 and 7% of the amount financed.

The intermediary between the seller and the consumer derives its remuneration by immediately crediting the merchant with the full deferred amount net of a fee, which is used to cover the assumption of the credit risk associated with the deferment, the collection of monthly payments, and the recovery of sums due for non-payment or late payment. In addition, the establishment of a commercial relationship with a network of sellers offers the third party the opportunity to further develop its business, for example by cross-selling other products.

Bankitalia, which identifies at least four of them: 1) the consumer, much less constrained by liquidity constraints, is often not even aware of contracting a debt, can accumulate a large number of payment extensions that are then difficult to repay, thus leading to an increase in indebtedness and delays in repayment, even of other loans contracted.

2) This product may present risks related to the lack of transparency of the contractual conditions, in particular with regard to penalties for non-repayment of credit, and the non-systematic reporting to credit information companies (Sic) widens the information asymmetries for financial intermediaries about the real debt load of the potential customer to whom they offer other forms of credit.

3) The simplified creditworthiness assessment means that those granting the deferment may not have an exact picture of the debtor's creditworthiness, ending up providing a loan to a person unable to meet his financial commitments.

4) Increase in Bnpl's share of impaired loans (NPLs).

With the transposition of the new Consumer Credit Directive, the Bnpl rules are changing. Most transactions will be included in the new Consumer Credit Directive (CCD2) with some positive effects for users, including compliance with stricter transparency rules on pre-contractual and contractual information, a more accurate creditworthiness assessment procedure by those granting the deferment, and safeguards that should reduce the risk of over-indebtedness and the onset of repayment difficulties.