This study aims at examining BNPL's influence on millennials buying behavior on fashion products and how it affects their consumption of apparel. As BNPL increasingly gains ground in e-commerce as a payment method, that is highly used because of the kind of functionality it provides to both brands and consumers in particular. Consumers, especially millennials are seen attracted to this payment method as it provides benefits that the traditional payment method lacks. Further, this study examines how these consumptions influenced by BNPL align with environmental sustainability. In order to fulfill the aim of this study, semi-structured interviews were conducted with ten female millennials from Sweden. The collected data were analyzed using thematic analysis. While the study followed an interpretive approach in order to acquire a deeper understanding of the millennial’s buying behavior and consumption. The findings show some main aspects that influence millennials to buy apparel products with the BNPL scheme. The aspects are familiarity and trustworthiness, transparency, and innovativeness which have influenced variety-seeking, impulse buying, brand loyalty, and dissonance-reducing behaviors. Meanwhile, ease of use, price sensitivity, and enticing dimension influence consumption through shopping practices and consumption patterns. However, there is a misalignment of these consumptions with environmental sustainability due to the knowledge of sustainability and the gap that existed in their attitude and behavior.

This paper presents an approach to model the risks associated with defaults, prepayments, and order returns in the context of unsecured consumer credits, specifically in buy-now-pay-later (BNPL) loans. The paper presents a Bayesian competing risk proportional hazard model to model the time to default, prepayment, and order return in BNPL loans. Model parameters are estimated using Markov chain Monte Carlo (MCMC) sampling techniques and Bayesian inference is developed using a unique dataset containing monthly performance data of fixed-duration interest-bearing consumer loans. / I denna rapport presenteras en metod för att modellera riskerna förknippade med fallissemang, förskottsbetalning, och returnering av order i osäkrade konsumentkrediter, mer specifikt i köp-nu-betala-senare (BNPL) krediter. Rapporten presenterar en Bayesiansk konkurrerande utfall-modell (competing risk) för att estimera tiden till fallissemang, förskottsbetalning och retur av order i BNPL-lån. Modellens parametrar estimeras med hjälp av Markov chain Monte Carlo (MCMC) metoder och Bayesiansk inferens uppnås med hjälp av ett unikt dataset med månatlig kassaflödesdata från räntebärande BNPL-lån.

Background: The payment methods available to consumers for online purchases have evolved over time, with options ranging from debit and credit cards to e-wallets like PayPal and Apple Pay. Among these methods, Buy Now Pay Later (BNPL) has emerged as a significant payment method alternative. At the same time the global debt had a record jump between 2021 and 2022, with low-income households being the ones that suffer the most. The convenience offered by BNPL payment method, coupled with the accelerated uptake of this method in recent years, has created regulatory scrutiny concerning its contribution to the financial health of the society.   Purpose: The purpose of this study is to explore the relation between BNPL and financial wellbeing. The Generation Z cohort in the USA was specifically chosen as the target demographic due to their pronounced online purchasing behaviors and the notable tripling of their overall debt within the 2021-2022 period. Methodology: A quantitative approach for collecting data and data analysis was conducted using an online survey. The survey’s questions are influenced by previous research on financial wellbeing and debt levels. The survey’s populations are consisting of 150 individuals from different demographic backgrounds. The survey’s results have been analyzed by writing Python scripts and use relevant statistic libraries. Results and analysis: A significant portion of the study's respondents, irrespective of various demographic factors such as gender, education, and income level, answered that their use of BNPL had little to no impact on their financial wellbeing. Of particular significance is the answers of those familiar with BNPL who did not attribute any deterioration in their financial health by using BNPL. A subset of respondents acknowledged the potential for BNPL to cause overspending or regrettable purchases, but these sentiments were not predominant. Such findings challenge the common belief that BNPL inherently distributes to financial imprudence. However, nuances emerge when examining specific demographics. For instance, male respondents and those with lower educational attainment displayed a slightly heightened propensity to link BNPL with overspending. Conclusions: The overarching narrative suggests that while BNPL might influence purchasing behaviors to some extent, its direct impact on the broader financial wellbeing of individuals is not conclusively negative. Recommendations for future research: Future research can examine deeper behavioral insights on the effects of BNLP, investigate its effects on specific industries (e.g. luxury fashion) or examine global trends (given the present study is focused on USA).

In this study we propose to enhance the predictive power of a Buy Now, Pay Later (BNPL) consumer credit scorecard by leveraging detailed product information. The object of analys is in this study is Klarna Bank AB, which is the largest retail finance provider in Sweden. This research conducts a quantitative study in order to firstly, investigate if it is possible to find subcategories that correlate more with credit risk than the existing product categories at Klarna. This will be investigated by categorizing already accepted orders into more granulated product categories than Klarna's existing level. Secondly, this study investigates how more detailed product categorization can improve a BNPL e-commerce consumer credit scorecard. Lastly, a qualitative analysis of what the business impact an implementation of this feature could entail for Klarna Bank AB is conducted. Our results demonstrate that it is possible to find subcategories that correlate more strongly with credit risk than the existing categories. The characteristics of the high-and low risk product categories align with existing research on online consumer behavior. More specifically, we found that luxury products, ego-related products, and products related to addictive behavior had the highest risk. We also contribute to existing research within the credit risk management field by finding that trending/new products on the market have a higher risk, and that the novelty of a product should be taken into consideration in credit risk prediction. By applying a hypothetical credit scoring model on a dataset of already accepted orders that took the new detailed product categories into consideration, the discrimination performance could be improved. However, risks regarding adding more data into a credit risk model need to be considered before implementing the proposed solution. Our study, therefore, demonstrates the potential of including more granulated product category information in a BNPL e-commerce consumer credit scorecard to improve risk prediction. While the results of this study are limited to the studied context, it is considered generalizable in that the proposed method could effectively be adapted to retrieve corresponding findings in other contexts. / Denna studie föreslår att förbättra prediktionsförmågan hos en konsumentkreditriskmodell inom Buy Now, Pay Later (BNPL) genom att utnyttja detaljerad produktinformation. Analysobjektet i studien är Klarna Bank AB, som är den största BNPL-aktören i Sverige. I detta arbete genomförs en kvantitativ studie för att först och främst undersöka om det är möjligt att hitta produktkategorier som korrelerar mer med kreditrisk än vad de nuvarande produktkategorierna på Klarna gör. Detta ska undersökas genom att kategorisera redan accepterade ordrar i mer granulerade produktkategorier än Klarnas befintliga nivå. Därefter ska det undersökas hur mer detaljerad produktkategorisering kan förbättra en kreditriskmodell för BNPL-företag. Till sist genomförs en kvalitativ analys över vilken affärspåverkan en implementering av denna lösning skulle kunna innebära för Klarna Bank AB. Våra resultat visar att det är möjligt att hitta underkategorier som korrelerar starkare med kreditrisk än de befintliga kategorierna hos Klarna. Egenskaperna hos de produktkategorier med hög och låg risk överensstämmer med befintlig forskning inom konsumentbeteenden online och psykologi. Mer specifikt fann vi att lyxprodukter, ego-relaterade produkter, och produkter relaterade till beroendebeteenden hade den högsta risken. Vi bidrar också till befintlig forskning inom forskningsfältet för kreditrisk genom att finna att trendiga/nya produkter på marknaden har högre risk och att det borde beaktas vid kreditriskbedömning. Genom att tillämpa en hypotetisk kreditvärderingsmodell på en dataset av redan accepterade ordrar, som tog hänsyn till de nya detaljerade produktkategorierna, kunde prediktionsförmågan förbättras. Risker med att lägga till mer data i en kreditriskmodell måste dock övervägas innan den föreslagna lösningen implementeras. Vår studie visar på potentialen i att inkludera mer detaljerad produktkategoriinformation i ett consumer credit scorecard för BNPL-företag för att på så sätt förbättra riskprediktionsförmågan. Även om resultaten av denna studie är begränsade till den studerade kontexten, anses det vara generaliserbart genom att den föreslagna metoden effektivt skulle kunna anpassas för att hitta motsvarande resultat i andra kontexter.

Denna studie utforskar den komplexa interaktionen och förhållandet mellan unga kvinnor och Klarnas plattform för "köp nu, betala senare". Genom en analys av plattformens värden och effekter samt identifiering av relevanta aktörer och utvärdering av etiska handlingsalternativ, strävar arbetet efter att kasta ljus över fenomenet “köp nu, betala senare”. Fokusgrupper med unga kvinnor som har olika relationer till användningen av Klarna har använts som metod, kompletterat med intervjuer med relevanta informanter. Resultatet ger en djupare inblick i hur Klarnas plattform har blivit en integrerad del av många unga kvinnors köpprocess. Det betonas att detta inte bara beror på dess uppenbara fördelar som bekvämlighet, säkerhet och flexibilitet, utan även på dess förmåga att anpassa sig till och tillgodose de specifika behoven hos denna demografiska grupp. Samtidigt lyfts dock även potentiella risker fram, såsom risken för överkonsumtion och överskuldsättning, vilket understryker vikten av att vara medveten om och hantera sådana aspekter vid användning av Klarnas tjänster. Denna undersökning bidrar till den bredare diskussionen om ansvarsfull konsumtion och ekonomiskt välbefinnande bland unga kvinnor, och ger vägledning för att utveckla strategier och riktlinjer för en hållbar användning av Klarnas plattform och liknande digitala betaltjänster i framtiden. / This study explores the complex interaction and relationship between young women and Klarna's platform for "buy now, pay later". Through an analysis of the platform’s values and effects, as well as the identification of relevant actors and evaluation of ethical options for action, the research aims to shed light on the phenomenon of “buy now, pay later”. Focus groups with young women who have varying relationships with the use of Klarna have been employed as a methodology, supplemented with interviews with relevant informants. The findings provide a deeper insight into how Klarna's platform has become an integrated part of many young women's shopping process. It is emphasized that this is not only due to its obvious benefits such as convenience, security, and flexibility, but also its ability to adapt to and meet the specific needs of this demographic group. Although, potential risks are also highlighted, such as the risk of overconsumption and overspending, underscoring the importance of being aware of and addressing such aspects when using Klarna's services. This research contributes to the broader discussion on responsible consumption and financial well-being among young women, providing guidance for developing strategies and guidelines for sustainable use of Klarna's platform and similar digital payment services in the future.

Abstract  Background: The evolution of technology has transformed the way we shop, with BNPL services like Klarna and Qliro gaining popularity among consumers. This form of short-term financing offers flexibility by allowing customers to either pay later or divide their costs into interest-free installments. While BNPL is initially associated with online shopping, BNPL has expanded to physical stores, enabling customers to choose from even more payment options. The fashion industry has especially benefited from the evolving BNPL, as it facilitates easier exploration of new styles and product comparison from the comfort of one’s home. Furthermore, BNPL users are more likely to make purchases, spend more, and exhibit higher customer loyalty.  Purpose: The purpose of this study is to explore the factors affecting the intention to use BNPL technology and how they differ in an online and in-store context.  Method: For the researchers to accomplish the purpose of this study, a qualitative research strategy was applied. The empirical data was obtained through semi-structured interviews held with Gen Z participants residing in Jönköping, who had previous experience using BNPL either in-store, online, or both. The data was later analyzed and interpreted using an abductive approach, using thematic analysis.   Conclusion: The research findings indicate that multiple factors influence purchase intention when using BNPL in both online and in-store contexts. A theoretical model, previous research, and empirical findings was incorporated for the study’s revised research framework including perceived usefulness, perceived ease of use, perceived risk, trust and security pain of payment and attitudes. For the online context, gen Z perceived all factors included in the revised research framework were found to have a noteworthy influence on purchase intentions using BNPL in the fashion industry. Moreover, the study identified both differences and similarities between the online and in-store context. For the in-store context, five out of the six factors in the revised research framework were perceived to be important for gen Z when purchasing fashion. Further the study suggests that there may be relational patterns between the factors, however the study did not examine relationships or degrees of associations between the factors, leaving room for future investigation.