The rise of buy-now-pay-later (BNPL) apps has revolutionized consumer spending, allowing individuals to make purchases and pay in instalments.
While these apps offer convenience, experts warn that they could encourage impulsive buying and financial mismanagement.
Many banks now offer BNPL plans, which allow consumers to make purchases and spread the cost over a fixed period without incurring interest charges, provided they adhere to the repayment schedule. Dr. Ben Lebig, Value Chain Mid-Term Strategist at Chevron, commented on this growing trend, noting that while the intent was to make high-value purchases more affordable, the rise of these apps has led to unintended consequences.
"The use of these apps has evolved into something else,"
he said, highlighting the tendency for impulsive buying due to the delayed financial impact.
Dr. Lebig cautioned that excessive reliance on BNPL apps could lead to a cycle of debt.
"These apps create a false impression that everything is affordable, resulting in impulse buying and spending beyond one's means,"
he warned. He advised consumers to track their spending closely and compare it with their monthly income to avoid falling into financial strain.
Users in the UAE have shared varied experiences. Abdullah Karama Al Zubaidi from Abu Dhabi views these services as a "double-edged sword," recognizing their potential for both helping with essential purchases and encouraging unnecessary luxuries. Conversely, Ahmed Salem, also from Abu Dhabi, praised the flexibility of BNPL apps but raised concerns about their alignment with Islamic financial principles.
Dubai resident Heba revealed her personal struggle with accumulating debt, stating she eventually closed her BNPL account after being overwhelmed by instalment payments. Afaf Haddad from Abu Dhabi expressed similar concerns, labeling the services as a "trap" that encourages easy spending.
As BNPL apps gain traction, consumers must strike a balance between enjoying their convenience and maintaining responsible financial habits to avoid overspending.
News Source: Khaleej Times
