Authors: Felix Aidala, Gizem Kosar, Daniel Mangrum, and Wilbert van der Klaauw
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Staff Reports
Understanding Consumer Demand for “Buy Now, Pay Later”
Number 1167
October 2025
October 2025
JEL classification: G51, G41, C93, R22
Consumer demand for “Buy Now, Pay Later” (BNPL) has surged, but the specific attributes consumers value remain unclear. We conduct a novel probabilistic stated choice experiment varying BNPL attributes across hypothetical scenarios to estimate consumers’ underlying preferences and their willingness to pay (WTP) for each feature. Consumers have a negative WTP for the standard bundle, on average, but younger and lower income consumers have stronger demand. Simulating consumer demand with estimated preference parameters reveals that most shifts away from the standard BNPL bundle reduce demand and create a more negatively selected pool of BNPL users, especially when interest is charged.
Author Disclosure Statement(s)
Felix Aidala-Brody
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Gizem Koşar
The author declares that she has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Daniel Mangrum
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Wilbert van der Klaauw
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Gizem Koşar
The author declares that she has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Daniel Mangrum
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Wilbert van der Klaauw
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Suggested Citation:
Aidala, Felix, Gizem Koşar, Daniel Mangrum, and Wilbert van der Klaauw. 2025. “Understanding Consumer Demand for ‘Buy Now, Pay Later.’” Federal Reserve Bank of New York Staff Reports, no. 1167, October. https://doi.org/10.59576/sr.1167
Aidala, Felix, Gizem Koşar, Daniel Mangrum, and Wilbert van der Klaauw. 2025. “Understanding Consumer Demand for ‘Buy Now, Pay Later.’” Federal Reserve Bank of New York Staff Reports, no. 1167, October. https://doi.org/10.59576/sr.1167
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