金融科技信貸的使用和停用：即買后付符合信用報告（英）

BISWorkingPapers

No1239

TheuseanddisuseofFinTechcredit:Whenbuy-now-pay-latermeetscreditreporting

byYanfeiDong,JiayinHu,YipingHuang,HanQiuandYingguangZhang

MonetaryandEconomicDepartment

January2025

JELclassification:G21,G28,G51,G53.

Keywords:FinTech,BNPL,consumercredit,informationsharing,creditreporting,overborrowing,BigTech

platforms.

BISWorkingPapersarewrittenbymembersoftheMonetaryandEconomicDepartmentoftheBankforInternationalSettlements,andfromtimetotimebyothereconomists,andarepublishedbytheBank.Thepapersareonsubjectsoftopicalinterestandaretechnicalincharacter.TheviewsexpressedinthemarethoseoftheirauthorsandnotnecessarilytheviewsoftheBIS.

ThispublicationisavailableontheBISwebsite().

?BankforInternationalSettlements2025.Allrightsreserved.Briefexcerptsmaybereproducedortranslatedprovidedthesourceisstated.

ISSN1020-0959(print)ISSN1682-7678(online)

TheUseandDisuseofFinTechCredit:WhenBuy-Now-Pay-LaterMeetsCreditReporting?

YanfeiDong?JiayinHu?YipingHuang§HanQiu?YingguangZhang‖

Abstract

Howdoesinformationsharingaffectconsumers’usageofFinTechcredit?Usingauniquedatasetof“BuyNow,PayLater(BNPL)”usersfromalargedigitalplatformandexploitingacreditreportingpolicychange,wedocumentthatconsumerssignifi-cantlyreduceBNPLusagewhentheBNPLlenderbecomessubjecttocreditreportingregulation.Thisreductionisparticularlypronouncedamongborrowerswithdefaulthistories,whoalsoshowimprovedrepaymentbehaviorscomparedtothosewithoutsuchrecords.ThedecreaseinBNPLusagealsoleadstoareductioninonlinecon-sumption,supportingthefinancialconstrainthypothesis.Ourfindingsindicatethatinformationsharingcanhelpmitigateoverborrowingandoverspending,withstrongereffectsseenamongyoungerborrowers,thosewhopreviouslyspentmore,orthosewithcreditcards.WealsohighlightthesynergiesbetweenBNPLlendingandBigTechplat-forms’ecosystems,whichimperfectlysubstituteforformalenforcementinstitutions.

Keywords:FinTech,BNPL,consumercredit,informationsharing,creditreporting,overborrowing,BigTechplatforms

JELclassification:G21,G28,G51,G53

*WethankTobiasBerg,FredericBoissay,KaijiChen,WillCong,EddeHaan,HanmingFang,AndreasFuster,ZhiguoHe,SeanHiggins,ClaireHong(discussant),YiHuang,YangJi,LeonardoGambacorta,JoshLerner,XiangLi,TongLiu,CongrongOuyang,RuolanOuyang(discussant),WenlanQian(discussant),TianyueRuan,TarunRamadorai,JoseScheinkman,Shang-JinWei,WeiXiong,YunqiZhang,andparticipantsattheNBERChineseEconomyWorkingGroupMeeting2024,ChinaFinTechResearchConference(CFTRC2024),CCERSummerInstitute2024,2024ABFER-JFDSConferenceonAIandFinTechandtheBISresearchseminarfortheirhelpfulsuggestionsandcomments.TheauthorsacknowledgeandappreciatethesupportsfromtheDigitalEconomyOpenResearchPlatform().Alldatawassampledanddesensitized,andwasremotelyanalyzedontheAntOpenResearchLaboratoryinanAntGroupEnvironmentwhichisonlyremotelyaccessibleforempiricalanalysis.WearegratefultoFangWang,JianHou,ShuoShan,YaoHe,andXianJianforfacilitatingthedataandSongHanforconductingthesurvey.TheviewsinthispaperarethoseoftheauthorsonlyanddonotnecessarilyreflectthoseoftheBankforInternationalSettlements.Allerrorsareourown.

tyfdong2021@.NationalSchoolofDevelopment,PekingUniversity

戊jyhu@.ChinaCenterforEconomicResearch,NationalSchoolofDevelopment,PekingUniversity;InstituteofDigitalFinance,PekingUniversity.

§yhuang@.ChinaCenterforEconomicResearch,NationalSchoolofDevelopment,PekingUniversity;Insti-tuteofDigitalFinance,PekingUniversity.

Than.qiu@.BankforInternationalSettlements.

Ⅱyingguang.zhang@.GuanghuaSchoolofManagement,PekingUniversity.

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1Introduction

Non-bankfinancialtechnology(FinTech),whichenablelenderstoextendcredittoindivid-ualsunderservedbybanks,havesignificantlypromotedfinancialinclusion(e.g.,Goldsteinetal.,2019;Stulz,2019;Fusteretal.,2019;Surietal.,2021;Bergetal.,2022).However,theFinTechinnovationsoftendonotshareborrowerinformationwithotherlenders,makingtheirlendingpracticesopaqueandpotentiallyleadingtotheaccumulationofdelinquencyriskoutsidetheregulatoryframework.Aprominentexampleisthefast-growing“buynow,paylater(BNPL)”industry,whichconstitutesanincreasinglylargefractionoftheconsumercreditmarket.SeveralconcernsassociatedwithBNPL,suchasoverborrowingandoverex-tensionrisks(deHaanetal.,2024;Cornellietal.,2023b),areoftenlinkedtothelackofcreditinformationsharing.1

Theinformationsharingviacreditregistriesservesasanessentialfinancialinfrastructure,rewardingthosewhomaketimelypaymentsandpenalizingthosewhodefault(e.g.,GarmaiseandNatividad,2017).Therefore,informationsharingmightincentiviseconsumerswhooverborrowandoverspendtoreducetheirBNPLusageanddelinquency,whilethosewhoseecreditreportingasanopportunityforcreditbuildingaremorelikelytoincreasetheirBNPLusage.However,althoughBNPLhasprovokedpolicydiscussionsaroundtheworld(Cornellietal.,2023a),fewcountrieshaveimplementedsuchcreditreportingrequirements.ThisraisesanimportantyetunderstudiedempiricalquestionaboutwhethercreditreportinghelpcouldreduceoverborrowingrisksassociatedwithBNPL.

OurpaperisthefirsttosystematicallyanalyzetheimpactofinformationsharingonBNPLcreditusage.Weassembleauniquedatasetof200,000randomlyselectedBNPLusersfromHuabei,China’slargestBNPLlender.2Ourpurpose-builtdatasetcontainsuser

1Forinstance,theConsumerFinanceProtectionBureau(CFPB)intheUnitedStatesnotedthatfewBNPLlendersfurnishedconsumerinformationtonationwideconsumerreportingcompaniesuntilrecently,whichcouldhave“downstreameffectsonconsumersandthecreditreportingsystem.”

2Launchedin2014byAlipay,oneofthetwodominantdigitalpaymentplatformsinChina,Huabeihasgainedmasspopularity,attractingapproximately500millionusersasof2020.SeeAntGroup’s(suspended)initialpublicoffering(IPO)prospectus,/disclosure/listedinfo/bulletin/star/c/688688_20201022_1.pdf,August2020.

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characteristics(suchasage,gender,andcityofresidence),accountopeningdate,monthlyBNPLusage,andconsumptionpaymentsviaAlipay.Furthermore,weexploitamajorregulatorychangeinChinain2021thatincorporatedHuabeiintothenationalcreditregistry,whichservesasaleadingexampleinBNPLregulation.3InSeptember2021,Huabeiissuedapublicstatemento?iciallyannouncingitscompliancewithcreditreportingregulations,beforewhichHuabei’suserinformationremainedproprietarydatawithinAlipay’secosystem.4

Weguideouranalysisfollowingtheoriesoninformationsharingandcontractenforcement(JappelliandPagano,2002;PadillaandPagano,1997,2000;Pagano,MarcoandJappelli,Tullio,1993).OurmainanalysisfocusonBNPLuserswhohadalreadyobtainedaHuabeicreditlinebeforeoursampleperiodbetweenJuly2020andDecember2022.SincetheseborrowershadalreadygonethroughthescreeningprocessandobtainedaccesstotheBNPLproduct,wecanisolatethepost-lendingeffectofinformation-sharing(i.e.,asadisciplinedevicetoreducemoralhazard)fromthepre-lendingeffect(i.e.,informationprovisiontoalleviateadverseselection).

Interestingly,wefindthatthecreditreportingregulationhassignificantlyreducedcon-sumers’usageofBNPLcredit.Onaverage,consumersreducetheirBNPLpaymentsby14%relativetothepre-policyperiod.BothextensiveandintensivemarginsdrivethisdeclineinBNPLusage:consumersarelesslikelytouseBNPLforpayment,andevenwhentheydo,theaveragepaymentamountviaBNPLdecreases.Moreover,thisshiftawayfromBNPLcreditrepresentsastructuralchange.Specifically,theshareofHuabeipaymentsintotalconsumptiondecreasesby7percentagepoints,whiletheshareofpaymentsthroughcredit

3AccordingtoChina’sRegulationsofCreditReportingAdministration,institutionsengagedincreditbusinessshouldprovidecreditinformationtothecreditreportingsystem.However,FinTechinnovations,includingBNPLcredit,circumventedthiscreditreportingregulationusingmicroloanlicensesinsteadofbankinglicenses.Afterthecollapseofthepeer-to-peer(P2P)lendingindustryinChinain2019,regulatorsstartedtotightenregulationsandcloseregulatoryloopholes.

4Specifically,accordingtothenewregulatoryframework,theHuabeiBNPLproductappearsasare-volvingcreditaccountinusers’creditreportsatthecentralizedCreditReferenceCenter(CRC)underthePeople’sBankofChina.Bothpositive(e.g.,timelyrepayment)andnegative(e.g.,defaults)informationisreported,togetherwiththebasicaccountinformation(e.g.,lineofcredit,accountopeningdate,andutilization.)TheregulatoryauthorityindicatesthatallHuabeiuserswilleventuallybeincorporatedintothecentralizedcreditregistry.

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anddebitcardsincreasesby2and4percentagepoints,respectively.ThisfindingrulesoutthepossibilitythatthereductioninBNPLusageisdrivenbycommonfactorsaffectingalldigitalpaymentoptions.

Wefurthertestthedisciplinarymechanismofinformationsharinginadifference-in-differences(DID)framework.WeclassifyBNPLusersbasedontheirdefaultrecordsbeforetheenactmentofcreditreportingpractices,assumingthatpreviousdefaultrecordsareasu?icientindicatorofBNPLborrowers’creditworthiness.Comparedtouserswhoneverdefaulted,BNPLuserswithdefaultrecordsreducetheirBNPLusagebyalargermagnitude.Theseborrowersalsobecomemoredisciplinedinrepayment,shownbyalargerreductionindefaultrates,supportingourhypothesisthatthedisciplinarymechanismprimarilyaffectsthoseconsumerswhoaremorelikelytodefault.5

ThereductioninBNPLusageisaccompaniedbyadecreaseinonlineconsumption,suggestingthatatleastsomeFinTechborrowersarefinanciallyconstrained.Furthermore,thereductioninBNPLcreditusageismorepronouncedamongyoungerconsumers,whoareoftenseenasmorevulnerabletooverborrowingrisks.Wealsofindstrongereffectsamongborrowerswithhigherinitialconsumptionlevelsandborrowerswithbankcreditcards,whomayshiftawayfromBNPLcredittoreducetheirdebt-drivenconsumption,minimizedefaultprobabilities,oravoidthestigmaassociatedwithBNPLborrowers.WedonotfindstatisticallysignificantchangesintheBNPLcreditline,implyingthatthisdecreaseinBNPLusageisnotdrivenbysupply-sidefactors.

ThecreditreportingregulationalsohasanimpactontheadoptionofBNPLcredit.NewuserswhostartusingBNPLaftertheregulation’senactmentareolder,moreseasonedinusingAlipay,andtakelongerbeforeadoptingBNPLcreditcomparedtothosewhoadoptedBNPLinpre-policyperiods.Thesepost-policynewusersarealsomoreprudentinusingBNPL,withsmallerBNPLpaymentsandlowerdefaultrates.Together,ourfindingssug-

gestthatinformationsharinghelpsencouragesmoreprudentbehaviorsbyBNPLusers,

5Weinterprettheseestimatesasalowerboundoftheactualimpact,consideringthepotentialspilloverimpactofcreditreportingonBNPLborrowerswithoutpreviousdefaultrecords.

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potentiallyreducingoverborrowingrisks.

Finally,tobetterunderstandthemotivesbehindtheseempiricalpatterns,weconductasurveyontheBigTechplatformtoinferBNPLusers’attitudestowardcreditreporting.Consistentwithourregressionresults,thesurveydatashowthatworriesaboutBNPL’snegativeimpactoncreditrecordsrankamongthetopreasonsforconsumersnotusingHuabeiSurveyrespondentswhopreviouslydefaultedmorelikelyto“reduceHuabeiusage”afterthecreditreportingregulation.Wealsofindsignificantheterogeneityamongconsumersregardingtheimpactofcreditreporting,withmanyrespondentsbelievinginthecredit-buildingpotentialofBNPLproducts,highlightingthedistributionalimpactsofinformationsharing.

OurworkcontributesthreemaininsightstotheliteratureonFinTech,informationshar-ing,andconsumercredit.Toourknowledge,ourpaperisthefirsttoempiricallyinvestigatetheimpactofinformationsharingonBNPLborrowers.First,ourstudyhighlightsamarket-basedsolutionforaddressingpotentialoverborrowingandoverextensionrisksassociatedwithFinTechlending.Aburgeoningliteraturefocusesmainlyontheconsumption-stimulatingim-pactofBNPLcredit(DiMaggioetal.,2022;Bergetal.,2023;Bianetal.,2023).6FewstudieshaveexaminedtheimplicationsforthefinancialhealthofFinTechborrowers.Notably,us-ingbankingdatafor10millionU.S.consumers,deHaanetal.(2024)findthatBNPLusersquicklyexperienceincreasesinbankoverdraftsandcreditcardbalances,whichisconsistentwiththehypothesisthatBNPLlendingfacilitatesoverborrowing.ByshowingthebenefitsofcreditreportingincontainingBNPLusageandonlineconsumption,webuildontheBNPLliteratureandprovidenewsolutionstothetradeoffinFinTechlendingbetweenpromotingtheinclusivenessoflendingandpreventingthedeteriorationofborrowers’financialhealth.

6Prominently,DiMaggioetal.(2022)providesafirstlookintotheBNPLmarketintheUnitedStatesandfindsthatBNPLaccessincreasesbothtotalspendingandtheretailshareoftotalexpenditures,regardlessofusers’inferredliquidityconstraints.Usingarandomexperimentatane-commercecompany,Bergetal.(2023)documentthatBNPLincreasessalesatboththeintensiveandextensivemargin.Bianetal.(2023)usegranulardatafromaworld-leadingBNPLproviderbasedinChinaandfindthatBNPLcreditcrowdsoutothere-walletpaymentoptionsandexpandsFinTechcredittounderservedconsumers,substantiallyboostingconsumerspending.OurdatasetissimilartothatinBianetal.(2023).Moregenerally,Agarwaletal.(forthcoming)findthatdigitalpaymentsincreaseconsumerspending.

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Second,ourpapercapturestheimpactoftheactualcreditreportingpolicychangeonFinTechlending,whichdistinguishesourpaperfrompreviousstudiesfocusingoninforma-tionalintervention.Whileextensiveliteraturehasinvestigatedtheimpactofinformationsharingontraditionalbanks,7fewstudieshaveexaminedtheroleofcreditreportinginthecontextofFinTechlending.Notably,Liaoetal.(2023)conductfieldexperimentsthroughaFinTechlender,whichprovidesfixed-termloansandpersistentlyreportsborrowers’loanperformancetothecreditregistry,andfindthatFinTechborrowerswhohavebeenwarnedofcreditreportingpracticesreducetheirdefaultratesandincreasetheirloantake-uprates.8Complementingpreviousstudies,ourpaperhighlightsthedisciplinaryroleofinformationsharingandtheimportanceofbreakingthe“creditinformationsegmentation”betweentra-ditionalandFinTechlenders.9

Morebroadly,wecontributetotheaccountingliteratureonhowreportingsystemsaffectdecision-making.Forexample,BalakrishnanandErtan(2021)findthatimprovingbanks’informationsetsandunderstandingofcreditrisksimprovesloanlossrecognition.Similarly,Sutherland(2018)reportthatinformationsharingcanreducerelationship-switchingcosts.Conversely,ifthequalityofborrowerinformationislow,theninformationsharingmayintroducepotentialfinancialrisks(Yang,2022;BertomeuandMagee,2011).Byexaminingthedecision-makingprocessofretailborrowers,wefocusoninformationsharingbyFinTechlendersanddemonstrateitsimpactonborrowerbehaviorsandcreditrisks.Ourresultsarealsoconsistentwithpreviousempiricalstudiesontheimpactofinformation-sharing

7Thesharingofloanperformanceinformationamonglendersviacreditregistrieshasbeenshowntobeane?icientwaytoaddressinformationasymmetryandimprovelenderscreening(Pagano,MarcoandJappelli,Tullio,1993).Moreover,creditreportingcanincreaseborrowers’repaymenteffortsbynarrowingincumbentlenders’informationadvantage,reducingtheirinformationrates(PadillaandPagano,1997),andrestrictingdefaultborrowers’accesstofuturecredit(PadillaandPagano,2000).Libertietal.(2022)usetheintroductionofaU.S.commercialcreditbureautoinvestigatelenders’adoptionofvoluntaryinformationsharingtechnologyandtheimpactonfirms’creditaccess.Theyfindimprovementsonlyforhigh-qualityborrowersinmarketswithgreaterlenderadoption.

8DifferentfromLiaoetal.(2023),weexaminetheactualchangeinthecreditreportingpracticeofFinTechlenders.Theborrowerpoolsmayalsovarybetweenthepeer-to-peerlendingcontextinLiaoetal.

(2023)andtheBNPLcontextinourpaper.

9Ourpaperalsoprovidesaninterestingmirrorimagetotheopenbankingliterature,whichexaminesthedatasharingconsentedbybankcustomerstoFinTechlenders(e.g.,Heetal.,2023;Nam,2023;Aloketal.,2024;Babinaetal.,2023).

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inthecontextofcorporateloans,suchasBehrandSonnekalb(2012)andDoblas-MadridandMinetti(2013),whofindthatinformationsharingreducesfirms’delinquencyratesandimprovesloanperformancemainlybydiscipliningborrowers.

Third,ourstudyspeakstotheinterplaybetweenformalandinformalcontractenforce-mentinstitutionsinBigTechlending.10TheBNPLproductinourstudyisprovidedbyaleadingBigTechplatformanddemonstratesaminimaldefaultrate,whichcontrastswiththosefindingsconcerningdefaultratesinFinTechlending(e.g.,DiMaggioandYao,2021).OurresultsareconsistentwithBergetal.(2023),whoalsofindmoderatecostsofpaymentdefaultsonBNPLviarandomexperimentsonane-commercecompany.Withavastdigitalecosystemandadominantmarketshare,BigTechplatformscanexertinformalcontractenforcement,suchastheexclusionthreat(Gambacortaetal.,2022),similartothelockouttechnologyofdigitalcollateral(Gertleretal.,2024).Hence,ourpaperechoesthebroaderliteraturehighlightingimportantsynergiesbetweenpaymentsandotherfinancialservices(e.g.,lending,deposit-taking,andinvestment).11

Theremainderofthepaperproceedsasfollows.Section2detailstheinstitutionalback-ground.Section3describesthedataandempiricalmethodology.WepresenttheresultsofBNPLusageanddefaultratesinSection4andconductfurtheranalysisonconsumptionandfinancialhealthinSection5.Section6presentsthesurveyresults.WeconcludethepaperinSection7.

10ThecontextofBigTechplatformsisdifferentfromthatofstandaloneFinTechlenders,asexaminedinthegrowingliteratureonBigTechlending(delaManoandPadilla,2018;Frostetal.,2019;Stulz,2019;Boissayetal.,2021;Gambacortaetal.,2022;Becketal.,2022;Hu,2022;Huangetal.,2022;Liuetal.,2022;Cornellietal.,2023a;Chenetal.,2023;Gambacortaetal.,2023).

11See,forexample,Jacketal.(2013);JackandSuri(2014);Donaldsonetal.(2018);Agarwaletal.(2019,2020);Buchaketal.(2021);Jiangetal.(2022);Ghoshetal.(2022);Parlouretal.(2022);ChenandJiang

(2022).

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2InstitutionalBackground

2.1BNPLIndustryandtheHuabeiProduct

BNPLschemes,whichallowindividualstodividetheirconsumptionexpendituresintosev-eralinstallments,havegainedsignificantpopularityinthepost-pandemicera.CFPBdatashowthatbetween2019and2021,BNPLloansissuedintheUnitedStatesbythefivesur-veyedlendersskyrocketedby970%,increasingfrom16.8millionUSDto180millionUSD.Concurrently,thetotalvalueoftheseloanssoaredby1,092%,risingfrom2billionUSDto24.2billionUSD.12TheglobalmerchandisevolumegeneratedbyselectedBNPLplatformsgrewfrom51.11billionUSDin2019to368.78billionUSDin2023(Cornellietal.,2023b).AccordingtotheFISGlobalPaymentsReport2023,BNPLtransactionsaccountedfor5%oftheglobale-commercetransactionvolumein2022.13

InChina,BNPLpaymentsareexpectedtoincreaseby14.3%,reaching136.63billionUSDin2024.14DifferentfromBNPLlenderssuchasA?irm,Afterpay,andKlarna,whicharemainlyFinTechcompaniesspecializinginBNPLpayments,theBNPLproductsinChinaareprovidedmainlybyBigTechplatforms,includingtheAntGroup(formerlyAntFinancial,afinancialspinoffofthee-commercegiantAlibaba,whichownsthepaymentsuper-appAlipay)andTencent(aleadingtechcompanythatownsthecommunicationssuper-appWeChat).

AleadingdigitalpaymentplatforminChina,AntGroupprovidesthefollowingtwotypesofconsumercreditproductsthroughitsAlipayapp:Huabei(meaning“justspendit”inChinese),thefocalBNPLproductinourstudy,launchedin2014,andJiebei(meaning“justborrowit”inChinese),apersonalloanproduct,launchedin2015.LikemostBNPLproducts,Huabeiallowsconsumerstosplitpaymentsintoseveralinstallmentsandrepayovertime.Specifically,Huabeioffersconsumersa40-dayinterest-freeperiod,afterwhich12CFPB,

/data-research/research-reports/buy-now-pay-lat

er-market-trends-and-consumer-impacts/,September2022.

13

/chart/31336/popular-buy-now-pay-later-providers-in-the-us/

.14

/news/home/20240226273220/en/China-Buy-Now-Pay-Later-Rep

ort-2024-75-KPIs-on-BNPL-Market-Size-End-Use-Sectors-Market-Share-Product-Analysis-Business-Model-and-DemographicsForecasts-to-2029ResearchAndM.

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consumerscansplittheirbillsintoinstallmentsover3to12months.ThedailyinterestrateforHuabeicanbeaslowas0.02%(equivalenttoanannualrateof7.3%),withmostloanshavingadailyinterestrateof0.04%orlower(equivalenttoanannualrateof14.6%).15ConsumersuseHuabeiinbothonlineandofflineshopping.16HuabeihasachievedmassivesuccessinChina,facilitatingaconsumercreditscaleexceeding1trillionRMB,or140billionUSD.Approximately500millionusersaccessedthisconsumercreditservicebetweenJuly2019andJune2020.17

2.2RegulatoryFrameworkforBNPL

TheBNPLbusinessfallslargelyoutsidethepurviewofexistingregulations.Inparticular,unliketraditionalconsumercredit,BNPLloansaretypicallynotreportedtocreditbureausand,consequently,donotaffectconsumercreditscores(Cornellietal.,2023b).TheCFPBnotedthatthissituationcandisadvantageBNPLborrowerswhopayontimeandaretryingtobuildcredit,astheymaynotreapthebenefitsoftimelypaymentsontheircreditreportsandscores.ThislackofinformationsharingcanalsoaffectbothBNPLandtraditionallendersattemptingtogaugeaprospectiveborrower’stotaldebtload.18

TheCFPBhasbeendevelopingstrategiesforindustryandconsumerreportingcompaniestoestablishaccurateandappropriatecreditreportingpracticesforBNPL.In2022,thethreelargestnationalcreditreportingcompanies(NCRCs)intheUnitedStates(i.e.,Equifax,Experian,andTransUnion)eachreleasedannouncementsontheirplanstoacceptBNPLpaymentdata.InMay2024,theCFPBissuedaninterpretiveruleconcludingthatBNPLloansaccessedthroughadigitaluseraccountareconsidered“creditcards”andarethereforesubjecttoRegulationZdisputeandrefundrequirements.Additionally,thereareongoing

15ThedataareasofJune2020./disclosure/listedinfo/bulletin/star/c/688688_20201022_1.pdf

16DatafromAlipayshowthat43.8%ofuserschooseHuabeiforofflinepayments,whereas54.2%opttouseitwhenmakingonlinepayments(Bianetal.,2023).

17AntGroup’s(suspended)IPOprospectus,/disclosure/listedinfo/bulletin/star/c/688688_20201022_1.pdf,August2020.

18

/about-us/blog/by-now-pay-later-and-credit-reporting/

.

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stateeffortsintroducingfurtherrequirementsforBNPLlenders.Forinstance,theNewYorkstatehasimplementedseveralrequirementsasofMarch22,2024,includingrequiringBNPLlenderstoobtainalicenseandmandatingthatBNPLlendersmake“areasonabledeterminationthattheconsumerhastheabilitytorepay”theBNPLloan.19

AcrosstheAtlantic,theFinancialConductAgency(FCA)intheUnitedKingdomhasraisedaquestionregardingtheconsumerwelfareimplicationsofintroducingamandatoryreportingrequirementforalllenders,whichwould“addresscallsforgreatertransparencyofinnovativecreditproductsenteringthemarket(particularlyBuyNowPayLateroffers).”Formostlenders,“thereiscurrentlynoregulatoryrequirementtoshareinformationwithCreditReferenceAgencies(CRAs).20Thislackoftransparency,asindicatedbytheFCA,meansthatcreditprovidersmaynothaveacomprehensiveviewofaconsumer’sfinancialsituationwhenassessinghisorhercreditworthiness.21

SeveralotherregulatoryauthoritiesarealsoexploringwhetherandhowtoincorporateBNPLdataintocreditreporting.Forinstance,Singapore’sMonetaryAuthorityhasimple-mentedacomprehensiveBNPLindustrycodethataddressesvariousaspects,includingcreditevaluation,creditinformation-sharing,andlimitsontheamountofoutstandingpaymentsthatcustomerscanhavewitheachBNPLprovider.22TheUAECentralBank(CBUAE)hasimplementeditsnewFinanceCompaniesRegulation,whicho?iciallyacknowledgesBNPLschemesasaformofconsumershort-termcreditandestablishesrequirementsfortrans-parencyanddisclosure.23InMay2023,theAustraliangovernmentannounceditsintentiontoimplementacustomizedregulatoryframeworkthatrequiresBNPLproviderstoobtainacreditlicenseandadheretospecificregulations.24SomecentralbanksarealsotestingBNPL

19

/insights/publications/2024/06/cfpb-applies-credit-card-rules

20SeetheWoolardReviewReport.

21

.uk/publication/corporate/woolard-review-report.pdf

22

.sg/news/parliamentary-replies/2022/reply-to-parliamentary-questio

n-on-bnpl.

23

https://www.centralbank.ae/media/izlhi5rb/cbuae-introduces-framework-for-the-regulat

ion-of-short-term-credit-facilities_en.pdf.

24

.au/consultation/c2024-504798

.

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servicesthroughsandboxprograms.25