INTERNATIONAL JOURNAL FOR INNOVATIVE RESEARCH IN MULTIDISCIPLINARY FIELD

Abstract: There is a widespread adoption of Buy Now Pay Later (BNPL) and Subscription Financing Models in the recent years. Due to this adoption, a significant change is observed in modern consumer credit operations. These models reduce the need for immediate payment by embedding financing options at point-of-consumption or as part of consumption decisions. As a result, consumers are attracted to benefits like convenience, flexibility and cost-effectiveness. However, several researchers and analysts have expressed concern over the possibility of harmful borrowing behaviours, low price transparency and negative financial impacts. This paper assesses the key drivers influencing a consumer’s decision to use BNPL and subscription finance models through a cross-sectional quantitative research approach. The results indicated that Financial Literacy, Perceived Convenience and Economic Benefits were all important influencers for Adoption Intentions. The results also highlighted broader behavioural and economic consequences resulting from BNPL and Subscription Finance Models. While the above models may provide increased access and flexibility to consumers, they may also promote convenience-based financial behaviour and create additional hidden credit risk exposure for consumers who do not utilize them responsibly. Thus, this study emphasizes the importance of increased transparency, responsible communication practices and education of consumers with regards to digital credit services.