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Is ″Buy Now, Pay Later″ the consumer credit magic bullet we’ve all been waiting for?

BIScom Subsection: 
Nigel Morris-Cotterill

Buy Now, Pay Later is a rapidly growing consumer credit sector. Last year, it is reported, it was used in 3.6% of retail sales in the UK. Is it a panacea or a plague?

Long Read: 17 pages.

Debit cards, again.

It is clear, then, that what everyone needs is a model based on debit cards. There is no benefit to having credit attached to a bank account that is not allowed into overdraft so a bank-linked credit card is not the solution.

So the model would have to be based on a pre-paid debit card. But the whole point of credit is to use someone else’s money. So the final link in the chain is that a finance company puts a notional credit balance on the card. It’s notional because the money isn’t credited to the card. In fact, it works more like an overdraft: the money is made available on demand up to a predetermined limit. This is known as ″revolving credit.″

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