\u201cBuy now, pay later.\u201d This phrase sounds like a solution. However,\nfor many people, especially the younger generation, it is slowly turning\ninto a trap.<\/p>\n
In recent years, Buy Now, Pay Later (BNPL) services have emerged as\none of the most popular financial products in Indonesia. Platforms like\nShopee PayLater, Kredivo, and Akulaku offer unprecedented convenience:\ninstant credit access without complicated processes, without credit\ncards, and even without human interaction. Just a few clicks, and the\ntransaction is complete.<\/p>\n
On the surface, this is a symbol of progress. Financial inclusion is\nincreasing, public access to financing is broadening, and domestic\nconsumption is being stimulated. However, behind this euphoria, we need\nto ask more deeply: does BNPL truly enhance people\u2019s financial\nwell-being, or does it merely create an illusion of prosperity?<\/p>\n
Data shows that this trend is no small phenomenon. Reports from the\nFinancial Services Authority (OJK) record significant growth in\npaylater-based financing in recent years, with dominance among young age\ngroups. Meanwhile, Bank Indonesia also highlights the rapid development\nof the digital economy, which further drives the use of instant credit\nservices.<\/p>\n
However, growth figures do not always equate to quality of\nwell-being. BNPL essentially changes how we define \u201caffordability.\u201d If\npreviously the ability to buy was determined by current available funds,\nnow that boundary has become blurred. A person can buy goods not because\nthey have the money, but because they have access to debt.<\/p>\n
This is what, from a behavioural finance perspective, is called\npresent bias\u2014the human tendency to value immediate gratification more\nthan future consequences. BNPL systematically exploits this bias. With\nsmall instalments, no interest at the start, and an instant process, the\ndebt burden feels light, even almost unnoticeable.<\/p>\n
The problem is that the accumulation of these small instalments often\nbecomes a ticking time bomb. For the younger generation, especially\nstudents, this risk is more serious. They are at the early stage of\nfinancial independence, yet they do not yet have adequate financial\nliteracy. When access to credit is so easy and self-control is not yet\nstrongly formed, impulsive consumption becomes almost inevitable.<\/p>\n
This phenomenon leads to a paradoxical situation. On one hand,\nindividuals feel more prosperous because they can fulfil various\nconsumption desires. On the other hand, their financial condition\nobjectively becomes more vulnerable. Perceived financial well-being\nincreases, but actual well-being may decline.<\/p>\n
This is where BNPL creates the illusion. Of course, it is unfair to\nblame the entire fault on the fintech industry. Financial technology\ninnovation fundamentally brings great benefits, especially in enhancing\nfinancial inclusion. For some people, BNPL can even be a tool to help\nmanage short-term cash flow.<\/p>\n
However, the issue lies in the absence of balance between ease of\naccess and user readiness. Current regulations tend to focus on industry\naspects, such as data protection and system stability.<\/p>\n
Meanwhile, the user behaviour aspect, which is the core of the\nproblem, has not received adequate attention. Financial literacy often\nremains just a slogan, not a systematic and sustainable movement.<\/p>\n
Yet, without strong literacy, financial inclusion can turn into risk\ninclusion. Therefore, there are three things that need collective\nattention.<\/p>\n
First, strengthening contextual financial literacy. Education is not\nenough to just explain what interest or instalments are, but it must\nalso touch on behavioural aspects: how to control impulses, understand\ncognitive biases, and distinguish between needs and wants.<\/p>\n
Second, more responsible product design. BNPL platforms need to be\nencouraged not only to maximise transaction ease but also to provide\nclearer warnings about debt risks. Total transparency of obligations\nmust become a standard, not an option.<\/p>\n
Third, the role of educational institutions. Universities can no\nlonger just teach financial management theory, but must also equip\nstudents with practical skills in managing personal finances in the\ndigital era.<\/p>\n
In the end, we need to realise that convenience does not always mean\ngoodness. In many cases, it is convenience that blurs the line between\nneeds and wants.<\/p>\n
If not anticipated seriously, BNPL has the potential to produce a\ngeneration that appears prosperous on the surface but is financially\nfragile inside. And when that happens, \u201cpay later\u201d will no longer be\njust a payment method, but a problem that we have all postponed\ntogether.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/the-illusion-of-prosperity-behind-pay-later-1775008282", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }