“Buy Now, Pay Later: No Fees. No Credit Check.”

Authors

Elaine LeeFollow

Abstract

Afterpay and Affirm, are financial technology (“fintech”) platforms that allow consumers to split their low-cost purchases into four installment payments–with seemingly no interest, fees, or hard credit inquiries. Similar to retailer fees on credit card transactions, these companies generate most of their profits as the intermediary between consumers and merchants. By flaunting celebrities like A$AP Rocky and Keke Palmer, the loan products are heavily advertised as the “cool” alternative to traditional credit cards and are particularly well-received among Millennials and Generation Z (“Gen Z”) consumers. Consequently, consumer advocates are duly concerned that lenders irresponsibly extend credit to a young generation, who remain particularly vulnerable to the “present bias,” which undervalues future losses and overvalues present satisfaction. Currently, U.S. regulators have not confined lenders to proper regulatory parameters and remain silent on the regulatory gaps caused by the third-party lenders’ intentional “skirt[ing] of the definition of a [covered] loan under some U.S. laws.”

Recommended Citation

Lee, Elaine (2023) "“Buy Now, Pay Later: No Fees. No Credit Check.”," Seattle Journal of Technology, Environmental, & Innovation Law: Vol. 13: Iss. 1, Article 2.
Available at: https://digitalcommons.law.seattleu.edu/sjteil/vol13/iss1/2