Should I Buy Now, Pay Later? An Empirical Study of Consumer Behavior in E-Commerce

Presenter Information

Junghyun Maeng, National University of SingaporeFollow
Khim Yong Goh, National University of SingaporeFollow
Chunmian Ge, South China University of TechnologyFollow

Paper Number

1575

Paper Type

Completed

Description

The Buy Now, Pay Later (BNPL) payment service in FinTech has rapidly gained popularity as a new payment option for consumers. However, its effect on consumer behavior remains unclear. This study investigates the effect of BNPL adoption on consumer purchase behaviors using a proprietary dataset from a large e-commerce platform. We find that BNPL adoption increases monthly spending by 11.2%, leads to a shift in purchase channel usage towards the mobile channel, and has a cannibalization effect on cash, debit cards, and credit cards payment methods. Our further analyses shed light on the mechanisms behind these effects. We find that the increased consumer spending as a result of BNPL adoption is driven by increased credit accessibility, mobile device ubiquity, and induced consumption effects. Our findings contribute to the growing body of literature on BNPL in FinTech and provide various practical implications for e-commerce and FinTech service operators.

Comments

21-UserBehavior

Recommended Citation

Maeng, Junghyun; Goh, Khim Yong; and Ge, Chunmian, "Should I Buy Now, Pay Later? An Empirical Study of Consumer Behavior in E-Commerce" (2023). ICIS 2023 Proceedings. 17.
https://aisel.aisnet.org/icis2023/user_behav/user_behav/17