Business Enquiries: https://www.thebluecats.com.sg/ Buy Now, Pay Later (BNPL) schemes have become incredibly popular, especially among young Singaporeans: 77% of Gen Z reportedly use them. While the concept sounds attractive—splitting a $170 meal into four interest-free payments—the concern is that people often spend more than they would have if they had to pay upfront. Although BNPL used to be everywhere, only three major providers remain in Singapore today: Atome, Grab’s PayLater, and Shopee’s SPayLater. Most others, like Hoolah, have already shut down. The appeal of BNPL lies in the low upfront cost, which psychologically feels less painful than paying the full amount at once. Some users are also drawn by promotions or points. However, BNPL is quite different from credit cards. Credit cards are tightly regulated and require a minimum income, while BNPL providers operate under a looser code of conduct introduced in 2022. For example, you don’t need to show income proof, and there are limits on how much you can borrow without it. While that sounds risky, it's part of a psychological strategy that encourages more spending. BNPL providers earn mainly from merchant fees, typically 2% to 8% of the purchase amount. That can be more than what credit card companies charge, but merchants still go for it because it works. Studies show BNPL increases average order sizes significantly; in the U.S., it can raise spending by 85%. For merchants, this means higher revenue per customer, even after paying the BNPL fees. It's not just a financial tool; it’s a psychological sales weapon that exploits our tendency to overspend when we feel like we’re not spending real money. BNPL can be useful when managed wisely. The real danger is the behavioural trap of overspending. Just being aware of this psychological trick already puts you one step ahead. Like the bystander effect, once you understand the mechanism, you're more likely to resist it.