A feminist approach to fintech: exploring ‘buy now, pay later’ technologies and consumer fintech

ABSTRACT

‘Buy now, pay later’ (BNPL) is a financial technology that is reshaping online consumption by allowing users to split payment for goods over 3–4 interest-free digital installments. While the use and value of BNPL has risen dramatically, it, and other consumer-oriented fintech, has received relatively little critical attention. Demographically, the majority of BNPL users are young and women and its negative impacts are disproportionately felt by lower-income groups, making this a specifically gendered financial technology. In this paper we develop a feminist approach to studying fintech, which we use to present a critical analysis of BNPL drawing on data from the US, UK, and Canada. Through this lens, we explore BNPL’s revenue streams, data collection practices, relative lack of regulation, and how these factors function structurally in the digital payments space, to analyze their impact for consumers and retailers in the context of rising consumer indebtedness and the financialization of consumption. We argue that BNPL is a fintech intervention that attempts to shift consumer practices with distinctly gendered implications for social reproduction, household finance, and everyday relations to debt and money.

KEYWORDS:

• BNPL
• consumption
• debt
• embedded finance
• feminism
• fintech

Introduction

‘Buy now, pay later’ (BNPL) technologies are significantly reshaping the landscape of consumer purchasing as they become a regular payment option at the point of sale, with many major stores and brands utilizing these technologies. BNPL providers such as Klarna and Afterpay enable consumers to pay for purchases in installments of 3 or 4 interest-free payments usually over a 6-week term. By spreading the cost of new purchases over a multi-week repayment period, BNPL makes purchases seem more affordable to consumers as they defer full payment without incurring interest or fees.¹ From the point of view of retailers, the move from cart to checkout is a notoriously ‘sticky’ moment of digital consumption, as consumers often leave products unpurchased in their digital shopping cart. BNPL firms market themselves to retailers, in part, as a solution to this problem, claiming that when full payment is not expected all at once, consumers are more likely to make a purchase, and to purchase more (Harris 2022). The BNPL business model, then, derives revenue from retailer (rather than consumer) fees, promising retailers additional sales by addressing issues of ‘cart conversion’ and by leveraging digital analytics to target consumers. BNPL is most frequently used online via a payment system integrated into a retailer’s website, but some brick and mortar retailers also have BNPL payment options at checkout. This embedded payment infrastructure is an evolution of similar financial systems like department store credit, installment loans, and incumbent banks’ own offerings of installment-based payments (Ossandón 2014). However, BNPL is different from prior systems because it is a third party operator that is neither retailer, bank, nor straightforward payments processor; instead, it is a digital platform and consumption ecosystem.

Financial technology (‘fintech’) has been celebrated by financial and technological boosters for its alleged role in disrupting existing banking and finance practices and democratizing access to credit. Critical commentators have challenged these claims, arguing that fintech may exacerbate inequalities archetypical of traditional finance, while introducing new ones associated with the data collection and individualization that accompanies the use of digital systems (Kværnø-Jones 2022; Lai and Samers 2021; Langley and Leyshon 2021). Here we build on debates around the cultural economy of fintech (Langley and Rodima-Taylor 2022) to explore consumer fintech from a feminist perspective, using BNPL as an example. While feminist approaches have contributed important insights into how finance ‘touches’ everyday life (Karaagac 2020; Pellandini-Simányi 2020), thus far, fintech has not been examined through a feminist lens. Feminist approaches can contribute to this burgeoning research by highlighting the impacts of fintech on consumers, households, and social reproduction, and centering its potentially discriminatory impacts on women, people of color, and other minoritized groups (Bhagat and Roderick 2020; Pollard 2013). Feminist approaches attentive to social difference² and the uneven geography of financial access as it relates to household consumption show not only how wealthy tech and financial elites stand to benefit most from fintech’s development and uptake, but also everyday and societal relationships toward, and dependence upon, debt, money, and payment is a distinctly gendered power relationship (Hall 2011; Joseph 2013), especially given the increasing (re)privatization of social reproduction (Roberts 2013).

Our feminist cultural economy of BNPL is informed by an expansive analysis of secondary data mostly from the US, UK, and Canada. These secondary data include industry data (e.g. from McKinsey, Pitchbook, Crunchbase, and CBInsights); corporate filings, which, among other things, provide information about how BNPL firms are banked (e.g. documents related to mergers and acquisitions, initial public offerings, and shareholder reports); marketing documents, to determine how BNPL firms present themselves to retailers and consumers, and how they differentiate their products and services (e.g. BNPL websites, ‘retail partner case-studies’ published by BNPL firms); gray literature, which provides context to the current regulatory landscape surrounding BNPL (e.g. major reports from the UK Financial Conduct Authority, the US Consumer Financial Protection Bureau (CFPB), and the Australian Securities and Exchange Commission); and the CFPB complaint database, which allows us to determine common issues with BNPL’s financial offerings that might otherwise remain unexamined.³ We also examine news articles and the limited academic writing on BNPL. Throughout the paper we combine this analysis of empirical secondary data with the theoretical insights from the academic literature. Thus, we critically examine the uptake of BNPL in relation to literature on the financialization of social reproduction (Roberts 2015), feminist approaches to the study of money and finance (Allon 2014), and critical perspectives to fintech (Knight and Wójcik 2020). We argue that BNPL is a fintech intervention that attempts to shift consumer practices with distinctly gendered implications for social reproduction, household finance, and everyday relations to debt and money. This is particularly salient since, demographically, the majority of users of BNPL are young and women. By providing this critical synthesis that looks across these different secondary and academic sources, we gain a comprehensive understanding of the potential harms of BNLP including the gendered implications and its impact on especially lower-income women consumers.

Given that BNPL has been barely explored empirically, in section 2 we offer a critical introduction of the current landscape of BNPL as a financial technology that is dramatically changing consumer practices in the context of expanding access to credit. In section 3 we examine literature on finance and the financialization of social reproduction in feminist political economy and feminist economic geography, then explore the cultural economy literature on finance and fintech to build a conceptual framework for a feminist cultural economy of fintech. In section 4 we apply this framework with a focus on BNPL’s targeting of specific consumer demographics, the importance of households and social reproduction as sources of speculation and value for BNPL firms, and the role of data and platforms in the financialization of social difference.

Background on the BNPL landscape

In this section, we outline the BNPL landscape, examining BNPL’s geography, revenue strategies, role in existing credit markets, securitization, and regulatory status. We consider aspects of the BNPL model that are important groundwork for the feminist analysis of fintech that we present in the following sections. As BNPL is rapidly changing the existing digital payments landscape, we used Pitchbook and Crunchbase, two global databases on private companies that track private capital markets and merger and acquisition (M&A) activity across the tech sector, to compile a dataset of BNPL firms (Table 1). This dataset captures merger and acquisition (M&A) activity within the sector, the nature and terms of financing, and the economic geography of BNPL firms. Other critical scholars have used similar methods to track such real-time activity, including the growth, evolution and financing, of private firms in the finance and technology sector (Langley and Leyshon 2022; Zook and Spangler 2023).

Table 1. BNPL firms ranked by CB ranking and by funding (June 2022).

Rank	CB Ranking	Funding (USD millions)	Leading Firms
1	Zilch	Klarna ($3,747)	Zilch (UK)
2	Cashew Payments	Affirm ($1,500)	Openpay (AUS)
3	Openpay	Uplift ($689)	Klarna (SWE)
4	Klarna	Atome ($500)	Affirm (USA)
5	tabby	Zilch ($339)	tabby (UAE)
6	Affirm	Sezzle ($302)	Sezzle (USA)
7	Sezzle	Openpay ($300)	Sunbit (USA)
8	Sunbit	Sunbit ($210)	Uplift (USA)
9	Uplift	tabby ($186)	Tamara (Saudi Arabia)
10	Tamara	Tamara ($116)	Nelo (Mexico)
11	Nelo	Rely ($75)
12	Postpay	Aplazo ($42)
13	Optty	QisstPay ($30)
14	Rely	Nelo ($23)
15	hoolah	Butter ($22)

Table 1 shows the 15 top BNPL firms based on a Crunchbase (CB) ranking (column 2) and by funding (column 3).⁴ Column 4 tracks ‘leading firms,’ showing firms that appear in both columns 2 and 3 as well as noting the country in which the firm is incorporated. Comparing this list to one compiled in August 2021 using the same methodology, there are significant changes in the geography and composition of BNPL firms, indicating that this is a rapidly evolving fintech space. The majority of BNPL providers are located in the United States and Australia, with rapidly growing markets in the United Kingdom, and other Western European nations. While this paper focuses primarily on the US, UK, Canada and Australia, reflecting major geographical centers of BNPL, the geography of these firms has expanded significantly – firms have risen closer to the top of these lists representing a geographical diversification of BNPL markets, and showing that investors see an opportunity in expanding BNPL services internationally, including in the UAE, Saudi Arabia, Mexico, and Singapore (Tan 2022). Klarna, a Swedish firm, is a market leader in the sector and is the sector’s oldest firm, founded in 2005, with 20 million users in the US as of August 2021. Paybright entered the market in 2009, and other major firms entered the market in the 2010s. Mergers and acquisitions are common in this space; a number of firms, including AfterPay, and Zip have all dropped off the 2021 list after being acquired. Many larger fintech and e-commerce firms, e.g. PayPal, now offer their own BNPL services, and some, e.g. Amazon and Shopify have exclusive deals with BNPL providers.

BNPL firms generate revenue mostly through retailer fees (about 5% or 6%) and make a small portion of their income from charging late fees to customers. Though these fees are higher than traditional credit card interchange fees (about 2% or 3%), many retailers are willing to pay the higher rate because BNPL firms claim to drive sales and attract additional customers (Hrushka 2021). To cover the cost of a consumer’s purchase in advance of their full payment, BNPL providers draw credit from mainstream banks. For example, Goldman Sachs extended a line of credit worth $250 million to BNPL platform Sezzle and in March 2023 offered $150 million to Saudi Arabian firm Tamara (Parasie 2023; Sezzle 2021). Many of these firms are financed through traditional banks and venture capital funds, with Goldman Sachs and Sequoia Capital appearing in more than one of these firms’ lists of funders. Only three BNPL firms are publicly listed. Affirm listed on the NASDAQ in 2021 and Sezzle and Openpay are listed on the Australian Securities Exchange, which speaks to Australia’s familiarity with the sector (Nainan 2019). Klarna is not yet publicly listed, but at the time of writing, Forbes predicts an IPO in the near future with a valuation of around $46 billion (Tepper 2022).

In the UK, BNPL accounts for approximately 1 per cent of the total credit market and the BNPL market has ‘accelerated very quickly and is still growing’ (Woolard 2021, 42). Payments via BNPL intermediaries also increased rapidly in the US, representing about 2 percent of US online retail sales (Tighe 2022). Since 2018, the number of BNPL users in the US grew by over 300 per cent per year, reaching 45 million active users in 2021 (Accenture 2021). BNPL services are most commonly used to buy electronics, clothing, and footwear and users are predominantly younger and women consumers (i.e. approximately those aged 26–42 as of 2023) (Financial Technology Association 2021). In the UK unsecured credit market, 75% of people using BNPL services are aged 18–36 and 75% of users are women (Woolard 2021; see Accenture 2021; ASIC 2020; Kriechbaum and Welsh 2021 for similar findings in the same and other national contexts). According to a report by the CFPB (2023, 2–3), in the US, ‘BNPL borrowers exhibit measures of financial distress that are statistically significantly higher than non-users’ and ‘Black, Hispanic and female consumers and those with household income between $20,001-50,000 were significantly more likely to borrow using BNPL compared to white, non-Hispanic and male consumers.’

The securitization of BNPL consumer debt offers a secondary stream of profit for BNPL credit origination, and introduces additional risks into what otherwise appears to be a fairly straightforward ‘vanilla’ credit offering. For example, in 2019 Zip Co established a securitization trust backed by BNPL receivables led by Australian National Bank (Brodies 2021), and other BNPL firms, including PayBright and Affirm, have announced securitization linked with their products. Questions about securitization are relevant for understanding BNPL’s immediate and long-term effects, including risk mitigation strategies, especially given evidence that securitization encourages the expansion of lending in general terms and predatory lending in particular (Aalbers 2009; Ashton 2009).

As a relatively new form of fintech, BNPL exists in an uncertain regulatory environment. Across geographies and regulatory bodies such as national governments, central banks, and credit bureaus there is no consensus on BNPL’s status as credit. Because BNPL firms are not formally recognized as lenders in most national contexts, and their installment product is not interest-bearing if payments are made on time, they have largely escaped being regulated. However, in recent years consumer protection bureaus and regulatory bodies in the US, UK, Australia and Sweden have produced reports that claim that BNPL is potentially harmful and needs further oversight, especially to protect consumers (Emancipator 2022; ICBA 2022).

Conceptualizing fintech from a feminist perspective

Feminist writing on debt, households, and social reproduction

The broader context for our examination of BNPL is the dramatic expansion of household debt since the early 2000s that has embedded finance into everyday life (Karaagac 2020) and has made finance and its attendant relations essential to the social reproduction of capital (Roberts 2013). These changes are evident in austerity-induced cuts to social welfare systems and wage stagnation alongside the dramatic overaccumulation of capital, deregulation of financial markets, and falling tax rates for corporations and the wealthy. This has driven structural inequality, as the costs of food, housing, and healthcare rise amidst wage stagnation, disproportionately affecting minoritized groups, including the poor, working mothers, and racialized people.

In this context of constrained affordability, social reproduction continues to represent both a considerable subsidy for capital – in which the costs of reproducing the labor force is exported to privatized households – and an unequal gendered division of labor in the home (Cooper 2017; Winders and Smith 2019). Describing what she termed as ‘debtfare,’ Soederberg (2013, 493–494) argues, ‘in lieu of living wages, savings, and adequate welfare services, credit cards, among other high-cost debt instruments, fill a void in neoliberal capitalism, functioning as a safety net to pay for essential services and subsistence needs.’ In Marron’s (2013, 786) analysis, ‘[t]he poor were no longer disenfranchized or exploited, the working-class victims of a capitalism that actively produces inequality; they became individual consumers subject to an array of risks.’ As households use credit to get by, Roberts (2013) argues that the expansion of household debt represents a (re)privatization of the relations of social reproduction – an effort by capital to extort value from ‘surplus’ and ‘unproductive’ groups (Pulido 2016; Winders and Smith 2019) – and the heteropatriarchal relations (i.e. the family, see Cooper 2017; Lugones 2007 among many others) upon which they depend.

Amidst these crises of social reproduction, banks and other financial services providers have targeted a range of financial products towards financially vulnerable households (Loomis 2018; Torkelson 2021). Payday lending and pawnbroking (Roberts and Zulfiqar 2019), for example, are short-term, high-interest financial products that target lower-income groups and benefit creditors at the expense of the working poor (Hembruff and Soederberg 2019; Langley et al. 2019). These alternative lending and consumption ecosystems disproportionately affect the social reproduction of vulnerable groups. The expansion of subprime mortgage lending in the lead-up to the 2007–2008 financial crisis, for example, disproportionately targeted Black and Latinx families for loans (Wyly et al. 2009). As Pollard, Blumenberg, and Brumbaugh (2021) argue in the context of buy-here pay-here auto lenders, subprime offerings cause vulnerable consumers to access credit with high interest rates and on terms that favor lenders. This is complicated too by the targeting of women for personal finance products that frames them as savvy investors reifying personal responsibility narratives (Allon 2014). Rather than normalizing the ‘need’ for incorporation into a system of credit that will always benefit lenders as financial ‘rent’ is derived from borrowers (Adkins, Cooper, and Konings 2020; Christophers 2022), this scholarship establishes the adverse effects of seemingly beneficial lending.

Consumer-facing financial and monetary technologies – that include BNPL payment platforms – amplify and complicate these issues. The above phenomena are variously implicated in different kinds of financial technologies, including credit via online dashboard and smartphone applications developed by incumbent banks (Kremers and Brassett 2017). While there is a robust literature on the use of M-Pesa and other mobile P2P technologies (Burns 2018; Maurer 2012), only recently have literatures on mobile payment technologies and consumer finance applications developed. Alongside a proliferation of credit offerings, there has also been a diversification of payment forms, such as electronic benefit transfer (EBT) cards (e.g. food and cash assistance), gift cards, payroll cards, single-use debit cards, and retailer-specific reloadable debit cards and currency-like reward systems (e.g. Starbucks cards). These electronic cards store value and are also a medium of payment, expanding the money form and shaping social meanings of how and where people spend money (Servon 2017; Zelizer 1994). Many of these forms of payment represent a reduction in access to actual money for working people and a transfer in wealth from the working classes to corporations and lenders that often benefit from unclaimed balances, or fees collected when the cardholder makes a withdrawal.

Cultural economies of financial technology

In response to the rapid growth of fintech, there have been several efforts to propose analytical frameworks to advance critical social science research in the field (Lai and Samers 2021; Langley and Leyshon 2022; Wójcik 2021). Empirically, critical studies of fintech have focused on digital and mobile payments; cryptocurrency and distributed ledger technologies, such as blockchain, investment, saving and financial planning; and crowdfunding and peer-to-peer lending (P2P). Much of this scholarship has taken an institutional or evolutionary approach and has focused on mainstream financial actors, such as Hendrikse, Bassens, and Van Meeteren’s (2018) work examining incumbent banks in the digital payments space, Sohns and Wójcik’s (2020) research on the development of fintech as part of London’s post-Brexit financial and entrepreneurial ecosystem, and Pollio and Cirolia’s (2022) examination of Cape Town’s attempts to become the fintech capital of Africa. Scholars interested in foregrounding the political dimensions of finance suggest reading fintech through a ‘platform political economy’ perspective (Langley and Leyshon 2021) that attends to fintech’s financial and technological infrastructures and to how the digital economy of finance is structured. This approach yields insights into what Langley and Leyshon (2021, 3) describe as the ‘highly centralized infrastructures’ of Big Tech (e.g. Google, Apple, Facebook, Amazon, Alibaba, Tencent) and enables fintech to be read as a new frontier of the digital economy where major tech firms ‘enclose and control’ the digital infrastructures upon which finance relies.

Research has also examined how fintech ‘innovations’ are dependent on platform and social media logics common in other sectors of the digital economy, especially to capture digital footprint data as well as users’ attention. For example, exploring the value of data collected via fintech platforms, Tiessen (2015) shows how the shift to app-based finance is a digital and not just financial transition: publicly posting about transactions and consumer purchases becomes an element of a new digital sociality of money and payment. She argues that app-based finance is a testing ground for cashless futures and digital currencies in which everyday financial transactions are more closely connected with data collection and social control, a form of ‘algorithmic enclosure’ with a ‘feel-good side effect’ (Tiessen 2015, 872). Zook and Spangler (2023) explore data broker platforms, noting how in the case of fintech brokers, data collected about debt is both exhaustive and extensive. Data and consumer profiles facilitate the repackaging of debt in increasingly complex ways creating new landscapes of indebtedness while obscuring relationships of ownership and obligation through securitization. In Tan’s (2021) writing about the retail investing platform Robinhood, interface design is key to how the app targets younger users, makes investing appear to be simple and accessible, and encourages users to stay on the platform by managing technical or affective ‘frictions.’ As Anderson et al. (2020) show, the data-driven and instant-gratification logics of digital technologies should give us pause for thinking through what developments in consumer lending using a fintech model will look like. As we explore further in later sections of the paper, the ‘technology’ side of fintech leverages social media, gamification, and other logics embedded in digital technologies for the purposes of data collection and other extractive, discriminatory, and exploitative financial processes.

Another body of work that more closely aligns with the feminist framework advanced here examines the outcomes and implications of fintech for users, including examining fintech’s profit motives and duplicitous actions on the ground. Critical scholarship in this area has largely focused on the democratization of credit access, raising concerns about the ethical implications of fintech in development initiatives and the global ‘financial inclusion’ agenda (Aitken 2015; Clarke 2019). Financial inclusion has been rolled out as a discourse describing a supposedly philanthropic mechanism but one that attempts to define, commodify, and extract data from a new kind of financial consumer (Gabor and Brooks 2017). According to Bhagat and Roderick (2020), in Kenya fintech firms enroll refugees into an unregulated financial system which enables a form of racialised accumulation that obscures fintech’s mechanisms of profit and corporate power. Relatedly, in scholarship examining the private company that disperses cash payments to welfare recipients in South Africa, Torkelson (2020:, 1) describes the formation of ‘a highly coercive and monopolistic financial system predicated on proprietary technologies.’ Here grant recipients find themselves confined to parallel, private banking infrastructure that enables the payment provider to use ‘sedimented racial geographies to “predate” (Taylor 2019) upon the social grant incomes of black and coloured women’ (Torkelson 2021, 69). This scholarship provides important evidence of how financial and digital technologies employ unscrupulous enrollment and lending practices that are clearly gendered and racialized, targeting vulnerable households for predatory profit.

A feminist approach to fintech

Given that fintech firms are reconfiguring the social and spatial relations of value creation and capture (Maurer 2015; O’Dwyer 2019; Sadowski 2019), further attention is needed on consumer-facing fintech, including who is transacting on fintech platforms and how users and their data are central to profit-making. For example, Lai and Samers (2021) ‘fintech cube,’ centers technologies, institutions, and products and services, but does not currently account for users, consumers, and social difference. The financial ecologies literature (Burton 2020; Lai 2016; Leyshon et al. 2004) provides a useful framework for exploring consumers and power relations, but has yet to develop an analysis of how power is associated with the reproduction of gendered and racialized subjectivities. A feminist approach can usefully extend existing insights in the fintech literature through a focus on consumption, social reproduction, and the household. Building on this work, our approach shifts the analytical inquiry to the end-user, asking how fintech is changing consumption habits and cultures of spending and borrowing, and to what consequence.

Tan’s (2022) research into BNPL in Singapore provides a valuable starting point, showing how BNPL platforms are transforming topologies of debt with individual and structural effects related to the financialization of everyday life. Tan (2022, 2) explores how BNPL ‘create[s] profitable, new segments in the consumer debt industry’ that produce ‘new financial subjects and subjectivities.’ He shows how BNPL incentivizes impulse-buying and overspending, feeding into an already over-saturated debt landscape by cutting across different consumer profiles, from prime to subprime. We build on Tan’s analysis here by utilizing a feminist approach that enhances his examination of BNPL’s power dynamics through a focus on social difference, households, and marginalized consumers. Especially as finance is increasingly imbricated in daily life, the feminist approach to fintech that we propose is a novel project that pushes current frameworks central to studies of fintech, offering a much-needed avenue for researching the downstream effects of the digitization of payment systems, online consumption, and indebtedness.

Building on the above sections, we assert a feminist approach to fintech based on the following conceptual factors: (1) an intersectional theorization of social difference – including class, gender, race, and sexuality – as centrally related to financial practices and co-constitutive of power relations and subjectivity in the targeting of the consumer; (2) a focus on the household and social reproduction as sources of speculation, financialization, and accumulation strategies within the fintech space; and (3) scrutiny over how fintech firms construct digital consumption platforms as ecosystems where robust, multi-attribute data is extracted, which has consequences for already vulnerable and marginalized populations. As Gabor and Brooks (2017) and others emphasize, what’s at stake in these discussions is the technologically- and financially-mediated mechanisms by which vulnerable populations are targeted for the speculative procurement of surplus value, through both old and new forms of credit. Amidst recent cost of living increases and limited and precarious work options (Reid-Musson et al. 2020), BNPL and other fintech ‘credit alternatives’ continue the predatory extraction of value from low-income households connected with the stagnation of real wages and the expansion of household debt since at least the early 2000s. While this gendered and racialized extraction continues in mainstream consumer credit offerings from incumbent banks, ‘alternative’ fintech products like BNPL are expanding these processes, purporting to be both a solution to an affordability crisis for consumers, and a new mechanism of revenue-generation for retailers and shareholders.

A feminist analysis of BNPL

Consumer targeting, demographics, and social difference

One of the central tenets of our argument is that financialization is a process that excludes marginalized groups while also exploiting them by turning social difference into both a market and source of value. As Roberts and Zulfiqar (2019) argue ‘the incursion of capitalist finance into new spaces works to undermine gender power both as it expels women and as it seeks to (re-)incorporate them into dominant forms of accumulation’ (593, emphasis original). This works out in the context of BNPL in a variety of ways. Thus, in this section we examine BNPL as a financial and digital technology that profits from a particularly gendered, classed, and racialised accumulation strategy.

BNPL utilizes an aesthetic style and instant-gratification sentiment designed to target a specific age group and gender demographic. The kinds of retailers that BNPL firms often partner with – clothing, make-up, and beauty sellers – market their products specifically toward young women (Woolard 2021). These firms’ marketing strategies are situated within the context of an age of visual social media platforms (e.g. YouTube, Instagram, and TikTok) that focus attention on influencers who set unattainable and unhealthy beauty standards (Tolentino 2019). This plays into the dynamic wherein the notion of ‘choice’ becomes central to digital (post)feminist imaginaries of selfhood and subjectivity that downplays structural concerns and casts feminism as a lifestyle that can be purchased (Gill 2016). On Affirm’s website, for example, they suggest that retailers use BNPL to ‘empower your customers to access the lifestyle they deserve,’ tapping into the aspirational attitudes of their younger consumers. Choice becomes central both to the goods purchased and the mechanism of payment (Petersson McIntyre 2021), i.e. choosing BNPL over credit cards or other payment options.

Banet-Weiser (2021) argues that this kind of marketing – influenced by social media – is characterized by corporations’ attempts to develop affective relationships with consumers within a discourse of authenticity where consumers cast themselves as their own brand through consumption and lifestyle choices. Under the gaze of the aesthetic ideals of social media, the gendered and racialised norms of this drive for authenticity are clear: platforms idealize a particularly feminized aesthetic that becomes ‘a disciplinary mechanism for women, a constant striving for a particular version of (white, cisgendered) perfection’ (Banet-Weiser 2021, 142). BNPL’s logics reinforce gendered notions of risk and responsibility, such as playing into sexist tropes that cast women as financially responsible and risk-averse (Predmore 2020), meaning that they may be more likely to take up a financial product that is presented as ‘interest-free.’ Here representations of women are caught between the figure of the irresponsible shopaholic and an effective manager of personal and domestic finance (Joseph 2013). Demographically women and racialized populations are also more likely to be affected by wage stagnation and face crises of payment (Adkins 2015); women have become disproportionately responsible for managing the effects of dwindling social welfare provision and stagnant wage growth on their households, which often translates into navigating increasingly diverse and dubious credit offerings (Allon 2014). As a result, financial products that stretch the repayment timeline across multiple pay periods appear to address the disjuncture between the temporality of payroll and the urgency of consumption, even while further downloading the burden for these structural issues onto the household. In this context, BNPL’s ability to make payment systems ‘more accessible’ is driven in part by gendered relations of money and finance, toxic racialised beauty norms circulating on social media (O'Connor 2023), and the immediacy of digital consumption enhanced with embedded payment technologies. Thus, even though repayment circumstances are qualitatively different from mainstream credit offerings, BNPL contributes to the suspended temporalities of indebtedness producing a moralizing affective mix of emotion that blames indebted subjects for their inability to (re)pay (García-Lamarca and Kaika 2016; Harker 2020).

As a new player in digital payments and credit provision, we have established that BNPL joins existing responses to crises of payability encouraging lower-income groups to ‘leverag[e] wages to access and service securitized debt,’ and in doing so ‘women and their households become fully exposed to what money may do on financial markets, and they shoulder the risk of this exposure’ (Adkins 2015, 44). Reports suggest some younger consumers view BNPL platforms as offering ‘a “safer” alternative to credit cards’ (O’Leary 2022) and how these platforms market themselves is specifically designed to give this impression. Indeed, for consumers who are able to follow the repayment schedule, BNPL may be a viable interest-free alternative to credit cards (Shupe, Li, and Fulford 2023). Yet, McIntyre (2021) found that many use BNPL because they have exhausted existing credit lines, and because BNPL firms use ‘soft’ credit checks and a simplified application process with almost instant verification. Thus while BNPL appears as a more responsible or safer option than mainstream or online credit offerings, it is not clear that all consumers are aware of the relative lack of consequences associated with a failure to repay on these no-interest options and whether this possibility for debt avoidance in the short-term is a driver of consumer activity.

BNPL thus multiplies existing credit markets, complicating temporalities of repayment (Davey 2019), and creating a new avenue and mechanism for indebtedness that overlaps with existing ones, including consumer credit offerings and household credit schemes that also disproportionately target working-class women (Marks et al. 2023). Where BNPL differs then is in its status as a platform technology, its promises to deliver additional consumers and consumption to retailers (i.e. rather than replacing incumbent banks or other providers as a source of credit), and in the ways that it purposely incentivizes purchases that consumers would otherwise not make (Tan 2022). Together these factors point to how BNPL leverages digital financing and marketing to disproportionately target women and lower-income consumers, attempting to further extract value from these groups.

The household and financing social reproduction

While BNPL firms generally target younger women who, while lower income, have some disposable income, evidence suggests that firms are broadening their target demographic, including by expanding their offerings to a wider range of products and services (CFPB 2023). For example, in the UK BNPL provider Zilch began offering interest-free loans for electricity and gas bills to households squeezed by the unexpected increase in energy prices (Thomas 2022). While this may seem like a generous offer to help financially vulnerable households weather a financial shock, debt and household energy advice groups suggest that consumers benefit more from negotiating their payments directly with their energy provider (ibid). Indeed, based on a survey of over 30,000 Americans, 14 per cent missed a payment once, and 12 per cent missed a payment more than once (Piplsay 2021). Thus, enticing desperate households to use a credit product for essential services, such as household heating, is a form of financial inclusion that raises ‘a big red flag’ for consumer advocate groups (Thomas 2022, np). This form of financial access is advantageous for BNPL providers seeking to capture the ‘network effects’ (Srnicek 2017) of expanding the number of users on their platform, but does not account for the harm that may come to users when they pay for essential services using an alternative payment method.

The combination of indebted and digital logics – and its avoidance of credit regulation – contribute to BNPL’s ability to target lower-income, gendered and racialized, and otherwise vulnerable households. Indeed, the allure of ‘interest free’ payments may result in further difficulties associated with payment deferral for households with unanticipated – or simply unpayable – expenses related to their basic necessities. This disproportionately affects those living paycheck to paycheck, on fixed or limited incomes, and is predatory as it often traps users in a cycle of indebtedness that is difficult to overcome. One study reports that 45% of BNPL users made purchases that ‘didn’t fit in their budget,’ and others suggest that consumers use BNPL to help conserve cash (Backman and Caporal 2022, np). Evidence from the CFPB’s consumer complaint database indicates that many also face tremendous difficulty recouping their payments when they return an item purchased using a BNPL payment system. FAQ sections on numerous BNPL provider’s webpages advise consumers to continue paying their installments until the originating retailer receives and acknowledges the returned item. This requirement to continue paying for goods that have already been returned, coupled with the delay in repayment, is especially harmful for those who have been encouraged to purchase goods that they may otherwise be unable to afford. This return/repayment limbo is a mechanism for extracting additional value from households, as installment payments continue to remit to the BNPL firm well before the consumer is repaid. It also represents a significant problem for households with limited liquidity, for whom the cash associated with a given return is essential for upcoming rent, bills, and grocery purchases.

BNPL creates a parallel consumption and payments ecosystem, where user’s personal information and financial details are stored for swift checkout, encouraging consumers to continue purchasing through its platform. By disconnecting households from mainstream credit offerings, BNPL makes it difficult for users to develop a credit profile given that most providers do not report users’ positive repayment history to major national credit scoring systems (Frankel 2022). This alternative payments ecosystem disadvantages users who would otherwise report a positive lending history that would enable them to establish creditworthiness for future purchases (i.e. having and maintaining a prime credit score; Kear 2013). Younger users may select BNPL precisely because they do not need an existing credit score or bank account to make purchases online; thus, while they might previously have developed a credit profile slowly over time, now they are encouraged to use BNPL services and may develop one much more slowly or not at all. Longer-term implications include BNPL users being forced to select riskier subprime credit options for home mortgages and automobiles, or becoming unable to make these purchases – which could make a dramatic difference for lower-income households – at all. That BNPL creates a payments ecosystem parallel to mainstream credit, disconnecting users from credit scores and financial citizenship, is likely to have substantial impacts for lower-income households that at present are difficult to fully predict.

Digital platforms and data extraction

Digital systems, including platforms and their data collection practices, are closely related to the production and reproduction of social difference. Elwood and Leszczynski (2018) outline a ‘feminist digital geography’ that centers intersectionality and social difference in an understandings of platforms and data extraction. Algorithmic forms of identity that exist within and across digital spaces reproduce gendered and racialized forms of inequitable access and treatment in complex ways (Cheney-Lippold 2011; Noble 2018). Data and algorithms are important elements to how fintech firms calculate the risk associated with lending to consumers in low-income countries and consumers with limited or negative credit files in the global north (Aitken 2017). Fintech companies collect traces of online behavior, known as digital footprint data, to track the habits and preferences of users (Gabor and Brooks 2017). BNPL firms use this digital data to inform borrowing decisions and to introduce consumers to specific retailers within the BNPL ecosystem. Klarna’s business-facing website, for example, suggests that retailers can ‘[l]everage AI-powered technology to deliver shoppable content that sells.’ Here, financial and consumption data inform digital marketing; ‘shoppable content’ is introduced to consumers in a closed shopping and payment ecosystem.

Data about consumption habits is not the only information valuable to BNPL firms: as Westermeier (2020) notes, money is also a form of data. Platforms like Venmo use payment as a form of social media and tech incumbents including Facebook, Google, and Apple are trying to catch-up in this space by offering a variety of digital payment services (Swartz 2020). While BNPL is not strictly a form of social media, the transactional data collected by these platforms represents an important element of their business model that may have wider implications around expanding forms of surveillance capitalism (Zuboff 2019). Swartz (2020, 124) frames the digital payment space less as an effort to claim new retailer portfolios and fees (which, as noted above, is currently where BNPL platforms make the majority of their revenue) and more as ‘a set of conflicts over ownership of and access to transactional data.’ Feminist approaches show that these data capture processes ‘overexpose women, people of color and impoverished groups to surveillance, governance and state violence’ (Elwood and Leszczynski 2018, 637). These data still represent an – at present – untapped resource for BNPL firms, and one that is relatively unregulated due to the initial ambiguity about whether or not to classify BNPL as credit (though we argue that it should be classified and regulated as such), which would grant protections to consumers under existing credit laws.

BNPL firms not only utilize user data to encourage existing customers to buy more, they sell themselves to retailers on the promise that BNPL will enable retailers to compete in a closely competitive market space and thereby bring them additional ‘high-intent shoppers’ (Affirm). Some commentators also suggest that BNPL adds value for retailers in terms of ‘building integrated shopping platforms that engage consumers through the entire purchase journey, from pre-purchase to post-purchase’ (Dikshit et al. 2021, 4). Existing scholarship on the platform economy and the sociality of digital payments (Kremers and Brassett 2017; Swartz 2020) suggests that BNPL firms use data flows from transactions to enhance the value of affiliated brands and the reputation of the BNPL provider itself. For retailers that operate in niche markets, or have limited reach beyond their home market, BNPL companies have ‘pulling power,’ connecting existing BNPL users to new retailers and driving user traffic to partner sites. Kenney and Zysman (2020) explain that ‘the orchestration of [the platform economy’s] power is concentrated, whereas its consequences are dispersed’ (58). As a result, big tech pursues monopoly profits through market concentration. For example, Klarna touts that globally it has 150 million active users as evidence that it has captured the market and provides significant rewards for affiliated retailers. Similarly, Affirm suggests that businesses can ‘accelerate customer acquisition’ by ‘tap[ping] into our premium network of 12.7M + shoppers.’

BNPL platforms thus boast a series of advantages for retailers: using consumer data and market analytics they drive cart conversion, create purchase intent, and increase average order size. They attract and deliver new, younger, mostly women consumers to the retailers’ platforms, including driving traffic to targeted pages on merchants’ websites and social media accounts (Dikshit et al. 2021, 2). Clearpay suggests that merchants ‘see a 15% increase in overall profit margin compared to pre-Clearpay levels.’ Because BNPL providers have the ability to introduce consumers to new retailers, BNPL platforms are encouraging retailers not just to see them as a payments technology, but as a marketing strategy that can target and attract a new population of customers. Given the demographic details above that show that BNPL users are mostly younger and lower-income women, these data-driven strategies are distinctly gendered: we should pay close attention to the kinds of retailers who are augmenting their online stores through BNPL services and how they conceptualize the user-consumer subject in doing so. For retailers operating in a niche market, looking to grow or scale their business, or constrained by their limited reach, affiliating with well-known BNPL providers offers legitimacy and visibility – for particular demographics of users – in a crowded market.

Data collection has become central to modern capitalist accumulation (Srnicek 2017), likened to colonial processes of accumulation by dispossession (Thatcher, O’Sullivan, and Mahmoudi 2016) both of which are processes that disproportionately negatively affect gendered and racialized populations. The value of transactional data to BNPL firms is vast and central to their existing revenue strategies especially when multi-attribute data is aggregated across platforms (Haberly et al. 2019). Dikshit et al. (2021, 4) suggest that BNPL could be part of a larger integrated digital platform ecosystem in which

the largest players are steadily building scale and reengagement with an aspiration to become a ‘super app,’ similar to large China-based players such as TMall or Ant group, that offer shopping, payments, financing and banking products in a single platform.”

BNPL is well placed as a payment system that also in some cases interacts with credit systems (i.e. if consumers use it to pay for higher value or luxury goods) that necessitate hard credit checks, meaning that, while BNPL does not strictly offer credit, these platforms interact with other databases storing sensitive information and use this knowledge to advance its position in the marketplace. BNPL interfaces with a demographic of consumers who might tend towards lower- and middle-income groups, which have in recent history been targeted as groups with untapped potential for monetization (Soederberg 2013).

Discussion and conclusion: the future of payments

In this paper, we have examined the BNPL landscape and have developed a novel feminist framework for analyzing the rapidly evolving field of fintech. Our analysis of BNPL technologies shows that there is much to be gained from developing the existing insights into fintech into a more concertedly consumer-oriented space, including offering much-needed attention to how gender, race, and other forms of social difference are central to how firms identify, market to, and monetize specific users. Through our original analysis of secondary data, we show how BNPL targets younger and lower-income women in predatory ways; how it intervenes in the (re)privatization of the social reproduction of households, disrupting access to incumbent credit offerings through new accumulation strategies for BNPL firms; and how individualized data-collection is leveraged to create appealing consumption platforms and interfaces and target specific demographics of users. Building on existing fintech scholarship, a feminist framework offers fresh insights into how BNPL consumers are also an ideal target for this parallel consumption ecosystem and payment space, as many younger individuals are unlikely to have established credit files given their limited borrowing history, but may have some income to support an aspirational lifestyle. Our empirical and conceptual contention is that a feminist framework for understanding fintech, that we explore here through close attention to BNPL users, deepens current understandings of fintech and opens new areas of inquiry.

BNPL is a nascent and growing digital monetary technology that is a significant part of the broader payment and credit landscape, interacting both with traditional and new monetary and financial systems. Existing forms of indebted subjectivity are becoming closely tied to BNPL in addition to and overlapping with both traditional forms of credit relationships, and re-emerging alternative forms of payment such as payday lending (Langley et al. 2019), pawnbroking (Roberts and Zulfiqar 2019), and department store installment loans (Ossandón 2014). Our analysis emphasizes the need to consider how social difference is central to fintech’s financial and technological strategies for profit-making, alongside differential impacts as they (re)emerge in distinct national contexts. Feminist perspectives underscore how power relations embedded within BNPL’s monetary and financial logics produce and reproduce gendered and racialized indebted subjectivities. We show how BNPL creates predatory relationships with consumers, proliferating forms of credit and relations of indebtedness that deepen rather than ameliorate inequality. Indeed, despite the state’s professed concerns about rising indebtedness and an acknowledgement that BNPL ‘poses potential harms to consumers’ (Woolard 2021, 6), at the time of writing, regulatory oversight of BNPL is limited, and there is a lack of meaningful consumer financial protection in the fintech space.

In addition to examining the terms and payment conditions of BNPL contracts, our research suggests a need to direct our concern toward the consumption ecosystem and the kinds of products that are available for purchase through BNPL systems. The use of BNPL to pay for groceries, healthcare, and other essential goods and services is different in important ways from the use of these forms of payment to purchase higher-end ‘luxury’ goods. That BNPL is a payments space, and for some users, a financial service encouraging indebtedness, represents an intertwining of often distinct arenas that complicates how we understand consumption, especially given the wide range of goods that can now be purchased through BNPL. Cultural economy perspectives are well-placed to solidify sophisticated understandings of these shifts, focussed as they are on power relations embedded in ‘(material) practices, orderings and discourses’ (Pryke and du Gay 2007, 341) and how financial and monetary firms, markets, and technologies function for and shape users. BNPL – as more a monetary than a financial technology – also returns our focus to earlier conversations in the cultural economy of finance around differential access to payment and the ability to pay that have perhaps fallen out of some of the current conversations around fintech (Allon 2014). Critical finance scholars should also examine the interface of consumption and credit use to understand how BNPL are imbricated in consumer culture and its affective structures. This necessitates attention to whether and by whom BNPL is understood as a credit product and importantly, to how regulators respond with consumer protection and other regulations as new forms of credit position themselves as alternatives to predatory credit to intentionally elude regulation.

By presenting a feminist framework for exploring fintech, we build on prior critical starting points to show how a focus on consumers and households, and on social difference, makes a valuable contribution to the fintech literature. BNPL offers one example of the possibilities of a feminist framework for understanding fintech, which captures the uneven effects and differential outcomes of fintech innovation that may be underappreciated in accounts that center firms, focus on path dependence and creation in the banking and financial services sector, and privilege elite actors. A feminist framework has the potential to further underscore the equity implications of prior fintech research (e.g. digital currencies issued by central banks, cryptocurrency and the blockchain, retail investing, proptech, and insurtech), but also centers topics that have been overlooked, including fintech purporting to address household financial insecurity, such as earned wage access (EWA) fintech. A feminist framework also draws attention to how different kinds of users conceptualize, relate to, and use fintech products differently, i.e. as a form of payment versus as a form of investment, a crucial distinction under-recognized in the current fintech discussions. Indeed, Afterpay founder Nick Molnar described BNPL as ‘a retail tool, not a finance product’ (Cagle 2019, np) which suggests that it is important to pay attention to how claims about BNPL made by its proponents differ from how it is actually used and experienced in different monetary and financial contexts. The ‘fintech’ label thus to some degree papers over the distinction between monetary and financial technologies posing an epistemological challenge for those exploring how fintech works within payments spaces. The stakes in this distinction from our point of view, are in how these respective technologies are apprehended in relation to the everyday material realities of transformations in the increasingly digitized and diversified payments landscape.

Acknowledgements

We would like to thank Lizzie Richardson, Jane Pollard, Margaret Walton-Roberts, and Matthew Zook for their thoughtful suggestions on an earlier draft of this paper and Luke Green for research assistance. We also thank the editors and anonymous reviewers for their guidance and helpful feedback.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 As long as payments are made on time according to schedule.

2 We use the term social difference to emphasize that the feminist approach that we outline is concerned not only with gender, but also with class, race, sexuality, indigeneity, ability, nationality, language, and so on. Our conceptualization of social difference draws on, for example and inter alia, Black feminist writing on intersectionality (see Crenshaw 1989) that views social difference as not a set of discrete and distinct identity categories that each seek their own representation within a liberal political framework and that can be simply analyzed separately in order to be accurately understood, but as a set of overlapping power relations that must be understood in their culmination and simultaneity.

3 Similar complaint records in the UK context are not aggregated or publicly available.

4 Columns 2–4 are independent.