arXiv subjects

Benedict Guttman-Kenney

Publications and source records attributed to Benedict Guttman-Kenney.

5 recordsLinked to original sources

arXiv2026

Buy Now, Pay Later: Academic Insights and Open Policy Questions

Buy Now, Pay Later (BNPL) has moved from a novelty product to mainstream consumer finance in the space of a few years. Before 2020, BNPL was a niche offering at the checkouts of online fashion merchants. BNPL then experienced substantial growth (Consumer Financial Protection Bureau, 2022; Salem & Udis, 2025), coinciding with increased online shopping since the onset of the COVID-19 pandemic in 2020. BNPL is now a pervasive payment option. In 2026, you can use BNPL to delay and split up payments for anything ranging from a pizza to your rent, and many items in between. As the market has grown, so has the academic literature. There is now sufficient research into BNPL to take stock and review what we have learned. In this article, we summarize insights from the economics, finance, and marketing academic literature. While we have learned a great deal about BNPL in the last few years, we also discuss many remaining open questions and current concerns impacting policy decisions. We start by explaining what BNPL products are and the business models of BNPL lenders. Then, we summarize the economics and psychology behind why some consumers use these products. Next, we describe the customer base that uses BNPL. We show the effects of BNPL on consumers, an area of research with substantial policy interest. Another area of policy interest is whether BNPL loans should be reported in a consumer's credit report. We explain why BNPL is typically not on credit reports and its implications. Finally, we offer some concluding thoughts.

econ.GN↗

arXiv2023

Weighing Anchor on Credit Card Debt

We find it is common for consumers who are not in financial distress to make credit card payments at or close to the minimum. This pattern is difficult to reconcile with economic factors but can be explained by minimum payment information presented to consumers acting as an anchor that weighs payments down. Building on Stewart (2009), we conduct a hypothetical credit card payment experiment to test an intervention to de-anchor payment choices. This intervention effectively stops consumers selecting payments at the contractual minimum. It also increases their average payments, as well as shifting the distribution of payments. By de-anchoring choices from the minimum, consumers increasingly choose the full payment amount - which potentially seems to act as a target payment for consumers. We innovate by linking the experimental responses to survey responses on financial distress and to actual credit card payment behaviours. We find that the intervention largely increases payments made by less financially-distressed consumers. We are also able to evaluate the potential external validity of our experiment and find that hypothetical responses are closely related to consumers' actual credit card payments.

econ.GN↗

arXiv2023

Buy Now, Pay Later (BNPL)...On Your Credit Card

We provide the first economic research on `buy now, pay later' (BNPL): an unregulated FinTech credit product enabling consumers to defer payments into interest-free instalments. We study BNPL using UK credit card transaction data. We document consumers charging BNPL transactions to their credit card. Charging of BNPL to credit cards is most prevalent among younger consumers and those living in the most deprived geographies. Charging a $0\%$ interest, amortizing BNPL debt to credit cards - where typical interest rates are $20\%$ and amortization schedules decades-long - raises doubts on these consumers' ability to pay for BNPL. This prompts a regulatory question as to whether consumers should be allowed to refinance their unsecured debt.

econ.GN↗

arXiv2021

The English Patient: Evaluating Local Lockdowns Using Real-Time COVID-19 & Consumption Data

We find UK 'local lockdowns' of cities and small regions, focused on limiting how many people a household can interact with and in what settings, are effective in turning the tide on rising positive COVID-19 cases. Yet, by focusing on household mixing within the home, these local lockdowns have not inflicted the large declines in consumption observed in March 2020 when the first virus wave and first national lockdown occurred. Our study harnesses a new source of real-time, transaction-level consumption data that we show to be highly correlated with official statistics. The effectiveness of local lockdowns are evaluated applying a difference-in-difference approach which exploits nearby localities not subject to local lockdowns as comparison groups. Our findings indicate that policymakers may be able to contain virus outbreaks without killing local economies. However, the ultimate effectiveness of local lockdowns is expected to be highly dependent on co-ordination between regions and an effective system of testing.

econ.GN↗

arXiv2020

Levelling Down and the COVID-19 Lockdowns: Uneven Regional Recovery in UK Consumer Spending

We show the recovery in consumer spending in the United Kingdom through the second half of 2020 is unevenly distributed across regions. We utilise Fable Data: a real-time source of consumption data that is a highly correlated, leading indicator of Bank of England and Office for National Statistics data. The UK's recovery is heavily weighted towards the "home counties" around outer London and the South. We observe a stark contrast between strong online spending growth while offline spending contracts. The strongest recovery in spending is seen in online spending in the "commuter belt" areas in outer London and the surrounding localities and also in areas of high second home ownership, where working from home (including working from second homes) has significantly displaced the location of spending. Year-on-year spending growth in November 2020 in localities facing the UK's new tighter "Tier 3" restrictions (mostly the midlands and northern areas) was 38.4% lower compared with areas facing the less restrictive "Tier 2" (mostly London and the South). These patterns had been further exacerbated during November 2020 when a second national lockdown was imposed. To prevent such COVID-19-driven regional inequalities from becoming persistent we propose governments introduce temporary, regionally-targeted interventions in 2021. The availability of real-time, regional data enables policymakers to efficiently decide when, where and how to implement such regional interventions and to be able to rapidly evaluate their effectiveness to consider whether to expand, modify or remove them.

econ.GN↗