The Future of Point of Sale Lending

Point of Sale (POS) lending, which includes Buy Now Pay Later (BNPL) and pay-over-time installment options, has taken off in popularity and appears on track to make further inroads into traditional commerce. The revolution has been fueled by a number of trends, including technological expansion enabling fast and anywhere loan application; a rise in ecommerce triggered in part by stay-at-home shopping during the pandemic; and consumer and merchant demand for alternative forms of payment and credit (i.e., beyond credit cards). The BNPL “pay-in-4” credit model has attracted the most attention, and in September 2022, the Consumer Financial Protection Bureau issued a report on the BNPL marketplace, identifying a number of concerns and expectations for going forward. While many firms have expanded beyond “pay-in-4” BNPL to offer traditional loans at checkout, a number of these models leverage technologies and principals that have made BNPL explosive and thus could be subject to similar future scrutiny. At the same time, the economic slowdown is likely to stimulate even more demand from consumers, just as the pressure from the regulators and the capital markets are heating up. This session brings together a regulator, former regulator and practitioner, and a current practitioner to answer these questions.