Hey! Buy now, pay later! Yes, you!

By Shreya Nidumolu

These days, businesses and marketers use the allure of exciting experiences, small joys, and an inescapable FOMO for all things glamorous to their advantage. Young adults in particular are willing to splurge on fun, an escape that is otherwise infrequent between job-hunting, gruelling education, and limited financial freedom amid uncertain economic times. While homeownership seems largely impossible, the instant gratification of tickets to popular experiences, such as California’s famed music festival ‘Coachella’, or even small luxuries like a take-out meal are made easy with the simple help of buy now, pay later (BNPL) schemes.

In 2025, it was reported that 60% of general admission attendees used Coachella’s BNPL plan, where an upfront fee of A$64 is required and the remaining cost of the ticket (starting at A$782) is paid at a later date. Attendees are required to complete their payment plan before the festival or risk having their tickets cancelled. But this risk of cancelled tickets was clearly not a deterrent; the audience for Coachella’s BNPL proposal is primarily a younger demographic, many of whom already use apps such as Afterpay or Klarna to finance smaller purchases like shopping hauls, food and more.

The BNPL model appears to be the perfect fix for those who like to have the ‘nice thing’ before they can actually afford it. And whilst paying in interest-free instalments seems harmless enough, these BNPL lenders have the same dollar-driven, profit seeking objective as any other business which can entice consumers into perilous financial overcommitment. However, as consumers place their purchasing power with BNPL entities rather than the primary seller, missing payments means more than just missing out on the purchase, as these services make their profit through late and merchant fees.

Let’s take Afterpay as an example: on orders above $40, Afterpay charges an initial Late Fee of $10 and an additional Late Fee of $7, with a maximum up to $68. Additionally, banks will charge a dishonour fee – all on top of the original retail price of the good or service. Moreover, Afterpay makes revenue through merchant fees, where they pay the merchant ~95% of the item’s cost and the consumer pays Afterpay 100% of the item’s cost. To recover any loss through the merchant fee, the original seller can increase their prices to make the original profit. Consumers are still the ones who suffer!

It’s concerning that BNPL schemes target younger people, demographics that are often less financially literate and more susceptible to financial uncertainty because of less stable incomesWhen used expertly, BNPL services can lend a helping hand in economic difficulties, but keeping on top of pending transactions is delicate, sometimes confusing, and ultimately a financial risk. When goods or services aren’t essential, it is important to keep track and stay ahead of purchases. Remember, you’re in control of your money, don’t let it control you!