Federal Government Launches Probe Into ‘Buy Now, Pay Later’ Industry

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The federal government is launching a probe into the nascent “Buy Now, Pay Later” industry.

Buy Now, Pay Later — a short-term financing option that lets consumers make purchases and pay at a future date, often interest-free — is increasing in popularity. Typically offering their services at checkout, BNPL companies such as Klarna, Afterpay, and Affirm have diverted between $8 billion and $10 billion in annual revenue away from banks.

Citing concerns about “accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology,” the Consumer Financial Protection Bureau announced on Thursday that it will “collect information” from Affirm, Afterpay, Klarna, PayPal, and Zip.

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