The Buy Now Pay Later Paradox: Financially Literate Yet Impulsive?

Objective: This study aims to investigate the relationship between materialistic values and BNPL usage, focusing on Gen Z consumers who were financially literate. The study also examines the moderation effect of perceived risks and benefits within this relationship. In addition, it explores the mediating role of BNPL usage on the relationship between materialism and impulsive buying. Theoretical Framework: This study is grounded on attribution theory, which explains that individuals try to comprehend the cause of events, like BNPL usage, by attributing them to internal and external factors, such as perceived risks and benefits. Method: The data were gathered using a cross-sectional survey and analyzed using Generalized Structural Equation Modeling (GSEM) based on 753 respondents, 513 of whom were Gen Z consumers who were financially literate. Results and Discussion: The study's findings show that materialism has a positive relationship with BNPL usage, especially among Gen Z consumers who are financially literate. Interestingly, risk perceptions seem to decrease the likelihood of this relationship while benefit perceptions enhance it. The study also finds that BNPL usage mediates materialism and impulsive buying behaviors, highlighting how BNPL can exacerbate materialism. Research Implications: This study has significant implications for business practice, highlighting the importance of responsible marketing strategies that account for how Gen Z perceives the risks and benefits associated with BNPL. The insights gained from this research will be valuable not only for marketers and financial service providers but also for financial advisors and policymakers seeking to promote responsible financial habits and economic stability in the context of emerging credit options like BNPL Originality/Value: This study contributes to existing literature by examining how financial literacy interacts with psychological factors to shape consumer credit decisions, particularly in a demographic poised to become future financial professionals. The findings offer valuable recommendations for marketers and policymakers, encouraging Gen Z to adopt sound financial management practices.