Commenting on the “buy now, pay later” (BNPL) payment method for online transactions in Singapore, SMU Assistant Professor of Finance (Education) Aurobindo Ghosh said higher interest rates over the past couple of years added to the costs borne by BNPL firms, as they absorb these rates using their revenue and bear the risk of non-payment by clients. This squeezes their profit margins. He pointed out that demand remains strong and said, "this is a supply-driven issue rather than a demand-driven one. Young adults, for example, still face limited access to cash, and the zero-interest feature of BNPL remains highly attractive." However, he is concerned that young adults may become accustomed to borrowing early in life, and gave advice on how people can avoid accumulating too much debt.
