Perceived Regulatory Inconsistenciesin Buy Now, Pay Later : An Analysis of the Debt Behavior andFinancial Well-Being Among Gen ZConsumers in the US

Sammanfattning

Buy Now, Pay Later (BNPL) services have expanded across the United States gradually in the past few years. Currently, BNPL services have become a popular short-term credit option, particularly among Generation Z consumers. However, BNPL services in the USA operate within a fragmented regulatory environment that differs across platforms and states compared to traditional forms of credit products. This study examines how the perceived regulatory inconsistencies in BNPL are associated with debt behavior and financial well-being among the Gen Z consumers in the USA. Using a quantitative explanatory research methodology grounded in a positivist approach, data was collected by a self-administered online survey (n=136). Gen Z consumers aged 18-29 who used BNPL within the past 12 months were considered the sample for this study. Structural equation modeling with 1,000 bootstrapped mediation was used to test the three hypotheses to examine direct as well as indirect relationships prevailing among perceived regulatory consistencies, debt behavior, and financial well-being. The findings reveal that perceived regulatory inconsistencies do not association debt behavior significantly. This finding suggests that Gen Z consumers do not seem to be adjusting their borrowing behavior based on their awareness of the regulatory gaps. However, debt behavior demonstrates a significant negative relationship effect on financial well-being. These results show that risky BNPL borrowing patterns such as loan stacking, missed payments, and using credit cards to cover BNPL obligations reduce financial well-being. Additionally, perceived regulatory inconsistencies show a direct negative effect on the financial well-being when the demographic factors such as age, gender, income, and BNPL usage were controlled. This finding could be more explained through a psychological pathway such as uncertainty and reduced confidence in consumer protection rather than a behavioral path. The proposed mediation of debt behavior between perceived regulatory inconsistencies and financial well-being was not supported. These findings of this study challenge empirical literature that regulatory gaps directly shape consumer borrowing behavior and argue that behavioral and psychological factors contribute to financial well-being. Further, this study contributes to consumer finance theory by further extending the Theory of Planned Behavior and Financial Well-Being theory frameworks. The current study offers practical implications for policy makers, BNPL providers, merchants and financial educators on the importance of behavior focused on regulatory design and suggests improved financial literacy education among Gen Z consumers in the USA.