Insights North America Paytech

Student Beans: Using BNPL Responsibly and Attitudes to Delayed Payments Services

Over the past year, the US public has become more open to new payment methods and services as a result of the pandemic. Student Beans, the student discount app, conducted research to further understand payment habits, analysing the trends associated with different generations.

A third of Gen Z Americans used a Buy Now, Pay Later service in the past year to help evenly spread the cost of big-budgeted fashion items and tech gear. Over a third (34 per cent) of Gen Z consumers felt that payback services were great, believing they help people afford the items they want to buy most.

Their mums and Dads disagree, with 60 per cent saying they can be risky as they encourage young people to spend more than what they can afford. Grandma and grandpas are even more unfavourable, with two-thirds (67 per cent) expressing the same opinion. Gen-Z are using the service for more materialistic things in comparison to older generations

Differences in purchases made via payback later services across generations show Gen Z are more likely to use services to buy clothes, whereas Gen X and Boomers are more likely to purchase more expensive, tech items.

Gen-Z’s buying behaviour is consistent with the finding that 34 per cent of customers stated that they felt it was somewhat important to have cool clothes to wear on social media.

A breakdown of category spending can be found below:

% of items purchased via Buy Now, Pay Later (in the past year)

Gen ZGen XBoomer
Clothes, shoes and accessories18%1stTechnology19%1stTechnology16%
Technology15%2ndClothes, shoes, and accessories13%2ndHomeware12%
Entertainment10%3rdHomeware11%3rdClothes, shoes, and accessories8%
Health and beauty8%4thEntertainment7%4thVacation travel and accommodation7%
Homeware5%5thVacation travel and accommodation6%5thEntertainment5%
Food and drink4%6thHealth and beauty5%6thHealth and beauty3%
Vacation travel and accommodation4%7thFood and drink2%7thFood and drink2%

With the above data in mind, Lewis Potton, Editor at Student Beans highlights his tips for using payback services responsibly:

Four tips for using payback services responsibly

1. Always start with a budgeting tool

Although Buy Now, Pay Later services are enticing, you must always ensure you’ll have the funds to pay off the borrowed money. Plan in advance by using spending spreadsheets or budget calculator tools to get a clear understanding of your monthly finances as well as what’s feasible within your budget.

2. Ask yourself – do I need this?

One-third (34 per cent) of Gen Z admit feeling pressured into buying expensive items to show off on social media. On average, young Americans take $103.16 from budgets intended for a monthly food shop to make clothing purchases only to be worn for Instagram and TikTok. Before making a high-end purchasing decision, always ask if you need that item or if it’s just for show.

3. Set calendar reminders

Keep the repayment process straightforward by setting yourself calendar reminders of what needs paying off and when. This will help improve your money management skills, and paying instalments back on time can even help to boost your credit score.

Potton further added: “Aside from helping with making purchasing decisions, Buy Now, Pay Later services can be a great way of helping young people to build their credit scores. If you can showcase that you’re able to commit to monthly payments on time, at the amount of what has been promised to pay, then this is an indicator to financial savers that you’re able to manage your money sensibly. Be warned though, late payments or no payments at all can cause serious harm to not only your credit score but could also lead to more serious issues such as debt.”

4. You can return an item if you’re unsure

One-in-four Gen Z shoppers will return an item bought using a payback later service before being charged. If a purchase is not what you were hoping for, check your item’s returns policy – as you should have every right to return it – even if purchased through a Buy Now, Pay Later payment scheme.

“Buy Now, Pay Later services are a great way of trying items before committing to fully purchasing them – a trend more evident during the pandemic-era where facilities such as fitting rooms can be limited.” Continued Potton, “In fact, one-in-four (28 per cent) Gen Z shoppers return items purchased via a buy now, pay later service, in comparison to just one-in-five (18 per cent) Gen X’s.”


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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