Hastee research slams ‘problematic’ buy now, pay later schemes

Buy now, pay later schemes are all the rage right now, with the likes of Klarna, Clearpay and Openpay landing high profile deals.

But there’s a downside. Many people are being lured into living beyond their means, according to a survey by Hastee, the workplace financial wellbeing tech provider formerly known as Hastee Pay.

Half of respondents said such options encourage them to spend money they don’t have and this rises to 59% for Millennials. 27% have experienced difficulties after using buy now, pay later schemes.

Millennials are the worst hit age group when it comes to experiencing difficulties. 36% said this has been the case. Financial stress has impacted their social lives (50%), relationships (40%), health (39%) and work (38%). The survey revealed that workers across all salary bands agree that the schemes encourage them to spend money they don’t have. The figure tends to rise in the higher salary bands.

“Buy now pay later schemes might seem an attractive option for consumers but they’re proving to be as problematic as more traditional forms of credit,” says Hastee CEO James Herbert.

“While they seem like a good short-term solution, they can cause consumers issues in the longer term. Missed payments can impact credit scores, cause longer term debt problems and could create an unhealthy reliance on credit cards and overdrafts as users struggle with repayments.”