How mindfulness reduces BNPL usage and how that relates to overall well-being

Abstract

Purpose The purpose of this study is to examine how mindfulness reduces consumers’ buy-now-pay-later (BNPL) payment scheme usage and how that relates to their overall well-being. Design/methodology/approach This study uses partial least squares structural equation modeling to test the hypotheses of a conceptual framework which is rooted in the extant literature, using an approximately representative sample of Australian consumers (N = 275). Findings This study finds empirical evidence for the ability of mindfulness to reduce BNPL usage through increasing consumers’ financial self-control and decreasing their impulse buying tendency. This study also obtains empirical evidence that greater BNPL usage is associated with lower subjective evaluations of consumers’ overall well-being by increasing their current money management stress and decreasing their expected future financial security. Research limitations/implications Future research could build on the effect of mindfulness that the authors find in this study and how it could be leveraged as a protective mechanism for consumers’ financial decision-making. Such research could involve mindfulness-based interventions, such as instant messaging within smartphone applications. Doing so would also help assess causality, thus addressing the limitation of the cross-sectional nature of this study. Practical implications The findings have implications for public policymakers and business practitioners. Financial counselors are encouraged to include the measurement of personality traits such as impulse buying tendency and financial self-control in intake meetings with clients and consider the benefits of offering short mindfulness training. Given the negative effect of BNPL usage on consumers’ financial and overall well-being, and the reputational risks this implies, BNPL providers are recommended to take more responsibility to ensure consumers do not fall into a debt trap, while retailers are advised to take steps to make payment processes more “mindful.” Originality/value Although mindfulness has established effects on consumer behavior, its beneficial influence on consumer financial decision-making has rarely been explored. This study also contributes to a better understanding of the antecedents and consequences of consumers’ BNPL payment scheme usage. Although its prominence is increasing in daily life, and despite the concerns of consumer advocates, policymakers and regulators regarding its risks, the topic of consumers’ BNPL usage has received little attention in academic research so far. Finally, this study extends the emerging financial well-being literature by demonstrating how BNPL usage can reduce consumers’ overall well-being through the mediating effect of increasing current money management stress and decreasing expected future financial security.

Understanding the psychological determinants of buy-now-pay-later (BNPL) in the UK: a user perspective

“…However, the current research findings also suggest that such decoupling is primarily temporalnotably at the point-of-purchase as (payment) pain is appreciably separated from (purchase) gratification. Thus, this offers additional explanation to support the work of Schomburgk and Hoffmann (2023), which alerts that BNPL providers should be careful of the negative association of this fintech service with purchase decisions, payment schemes and consumers' overall wellbeing.…”

“…The following review is, therefore, developed upon the extant, albeit limited, BNPL literature, and draws on promising material from credit card or mobile payment contexts, as an approximate analogue. Whilst this offers a useful lens for exploration, this literature is itself not fully formed and is likely to evidence fluidity and ambiguity, especially as there is limited current work to provide a comprehensive perspective from which to understand BNPL use (excepting Schomburgk and Hoffmann, 2023). Therefore, when such concepts are extended to a novel and evolving sector, such as BNPL, additional complexities can emerge, and this requires careful transfer to enable sufficient contextualization to the BNPL phenomenon.…”

“…The debates above can be extended to BNPL, as the low level of transparency and pain of paying using credit cards or mobile payment may be analogous, and Schomburgk and Hoffmann (2023) call for research that considers BNPL use and both concepts. BNPL payments are clearly delayed (e.g.…”

Cashless gambling: Qualitative analysis of consumer perspectives regarding the harm minimization potential of digital payment systems for electronic gaming machines.

“…CASHLESS GAMBLING AND HARM MINIMIZATION steps involved in making a purchase, but may increase the risk of overspending by deliberative decision making and the pain of paying experienced (Schomburgk & Hoffmann, 2023;M. Thomas et al, 2011).…”

“…However, our findings provide insight into areas of policy and regulation that are relevant to cashless gambling systems, both in Australia and internationally. “Frictionless” payments may have convenience benefits by minimizing as much as possible the steps involved in making a purchase, but may increase the risk of overspending by reducing deliberative decision making and the pain of paying experienced (Schomburgk & Hoffmann, 2023; M. Thomas et al, 2011).…”