Consumer Watchdog's Move to Classify BNPL Programs as Credit Cards Raises Industry Concerns
Critical Move in Financial Regulation
The government’s consumer watchdog has reclassified 'buy now, pay later' programs under the umbrella of credit cards, extending key consumer protections to a vast user base.
Rise of BNPL Programs
Amid the pandemic, BNPL services witnessed surging demand, leading to a substantial increase in loans and transactions transcending billions of dollars.
Companies like Affirm, Klarna, and PayPal dominated this new financial landscape, catering to consumers' desire for convenience and flexibility.
Consumer Rights and Industry Response
The move by the Consumer Financial Protection Bureau (CFPB) to regulate BNPL services has sparked mixed reactions from industry players.
While some companies view this as a positive step towards standardization, others argue about the stark differences between credit cards and BNPL solutions.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.