It’s the newest phenomenon as far as spending what you don’t have is concerned – as buy-now-pay-later services grow in popularity, financial experts are growing anxious about how potentially predatory they can be. This week, Tech Story reported on the troubling realities of “surveillance marketing” and how big tech companies like Apple use buy-now-pay-later services to increase frivolous spending and debt accumulation. They spoke with Nadine Chabrier, a senior counsel at the Center for Responsible Lending, for insight into what that could mean for the future of the debt industry. Here’s an excerpt:

“‘Apple has a tremendous amount of data on every person who has an iPhone, and they could leverage that to increase spending through Buy Now, Pay Later. And we found through the research that people aren’t really aware of that, and it can be a really insidious way of increasing spending,’ Chabrier said.
Typically, buy-now-pay-later apps are used for purchases of expensive products such as a new laptop or concert tickets. However, several Americans living paycheque to paycheque use the services for essential expenditures. With its growing popularity, reports indicate how it could make up about 14% of all e-commerce purchases.
Particularly, Gen-Z consumers have been visibly racking up debt through these services which, a SFGATE report suggests, could allow reckless spending above their capacity. Expectantly, buy-now-pay-later startups’ strategies would often copy a Silicon Valley startup’s glossy minimalism.”

Read the full article here.