similar payment plans for items purchased on
their cards. A report by consulting firm McKinsey
found that buy now pay, later startups diverted
between $8 billion and $10 billion in revenue from
traditional banks that would have likely financed
these purchases a few years ago.
AmEx said 58% of its customers have set up a
purchase plan for the first time this year, and more
than $5 billion worth of purchases have been put
on “Pay It, Plan It” agreements.
The rapid growth of buy now, pay later has also
caught the attention of politicians and regulators.
The House Financial Services Committee held a
hearing on buy now, pay later programs earlier
this month, where politicians asked for the
Consumer Financial Protection Bureau to put
more emphasis on monitoring the growth of this
type of financing.
“These products raise important questions about
the use of consumer data, the exploitation of
spending patterns, the application of lending
laws and the potential for unsustainable levels
of consumer debt,” said Rep. Steven Lynch,
D-Massachusetts.
The concern about overspending with these
programs is real, Rafikian said.
“At first it was fun to have access to items typically
out of my price range, but sometimes you get
surprised and a little miserable that you have all
these new payments due,” he said.