Many call this phenomenon the main driving force of the contemporary economy that switched to online shopping and in-app purchases during the period between 2019 and 2022. It is a product that attracts many people.

It works just like a typical credit but can be approved quickly, and many companies are competing for debtors.

While this looks like a perfect instrument to drive up consumption and fuel the economy that shows many symptoms of being in a recession, some experts are not so happy about it. Michael Zetser, an entrepreneur with a rich experience in fintech, leans toward a skeptical yet positive opinion.

What makes “Buy Now, Pay Later” Great?

Michael Zetser comments on the current state of affairs in the global economy: “at some point, people started thinking that globalization is a thing of the past. However, we are still living in a very interconnected world. Look at the crypto industry. It is a thriving ecosystem that relies on international trade and scalability. The cogs of the global economy must continue spinning.”

“The best way to keep the machine going is by ensuring that online businesses can move product. Buyers may not have the necessary purchasing power right now, but if we manage to keep the economy healthy, they will recover.

The buy now, pay later scheme is a great way for banks and fintech startups to provide an influx of cash and help e-commerce projects keep their lights on.”

The biggest issue with this approach is that the burden of debt is still falling on the shoulders of a consumer. Despite what many startups are trying to sell you, the producer of credit is still a bank. You will receive a credit and will have to pay back quickly. If you fail, fees will mount.

“The main predicament here is the fact that we are playing a dangerous game,” continues Michael Zetser. “We are betting on a very specific outcome where people have enough money in their pockets to pay back their debts.

It looks like a credit card with extra steps. What I personally do not like about this whole ordeal is that many consumers do not understand the severity of consequences that they will suffer if debts are not paid on time.”

Is there any other way to solve the financial crisis?

Michael Zetser believes that the fintech industry has enough good ideas to provide solutions that will solve the problem of dwindling cash flow in the economy. There are various ways to provide boosts to consumption without relying on banks.

“I’ve worked with several startups that are trying to increase sales volumes by providing beneficial discounts and working out deals with retail chains. Perhaps, the solution is not to borrow money, but to focus on maintaining the status quo and reshaping the economy without having the unachievable goal of infinite growth,” says Michael Zetser.

The economy will have to adapt to new realities that may start manifesting themselves quite soon. The internet will remain the biggest infrastructure on Earth and the most prominent facilitator of retail sales across the globe.

However, we need to fix the issue of cash supplies and stop printing money. Providing new tools to retailers and consumers is a great way of giving nations enough time to solve monetary problems.

Michael Zetser believes that the fintech industry must be working twice as hard to provide unique products and services that will generate value without creating new debts. Whether it is possible remains an open question that contemporary entrepreneurs will have to solve.

Buy now, pay later is here to stay

Too many companies and online retailers have embraced this concept and won’t give it up until it crashes or a better alternative shows up in the market. E-commerce projects have to focus on scaling up and growing.

It is impossible without tapping into new audiences and increasing sales. Michael Zetser believes that we need to look for alternative solutions, but cannot survive right now without using the buy now, pay later model.