One of the problems with making loans like BNPL such a standard part of the checkout is that they are SO easy. One may lose track of the payments and the amount of loans one has on the go.
Fifty dollars every two weeks for those sneakers may not sound like a lot, but then times that by five… or ten… things can start to get out of hand. This could be particularly problematic for those who already have low credit scores, BNPL’s most prolific users. Not only could a late payment drive their score down even further, but for those who are already “financially fragile,” losing track of the amount of loan installments could create a worsening cycle of debt.
Already, more than half of BNPL users have fallen behind on payments. As the sector is set for 157% growth by 2027, the situation could get a lot worse and quickly.
So Cushion has come up with a novel idea – instead of adding to the rising number of BNPL providers, why not create a platform to organize the ones consumers already have?
Now, this sounds simple, but most BNPL providers use phone-based authentication instead of accounts, making them difficult to scrape. Many of them also don’t report to credit bureaus, creating a false view of the consumers’ credit profile. So, how does one get an understanding of what BNPL loans and where?
Consumers’ inboxes – which in itself requires a whole other set of audits. So today’s featured article is not only a story of innovation and perseverance to try to help consumers make sense of the varied payment options they have today, but also can be seen as a comment on the BNPL sector’s approach to consumer protection.
Yes, its ease of access has opened credit out to a whole new demographic of people who are often left out of the credit system – fantastic. But as the use of BNPL evolves into a payment option for everyday purchases, perhaps the ease of access without many guardrails is creating a worsening issue for the consumers the sector seeks to serve.
Keeping track of multiple BNPL loans? There’s an app for that.
Cushion CEO Paul Kesserwani felt overwhelmed when he tried to keep track of several BNPL loans at once, so he shifted his fintech’s focus to help others in the same boat.
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