Loosening customers’ purse strings is not simply an incidental effect of BNPL implementation; from the product vendor’s perspective, it’s the point. Klarna’s website boasts that shops that implement its product see a 40% increase in average order value, a 20% increase in conversions, and a 46% higher purchase frequency.² Some of those transactions may take place because debt enables consumers to distribute the cost of necessary purchases over long periods of time. A customer may, for example, need a suit for job interviews, and only be able to afford it because of a BNPL payment option. However, many of Klarna’s customers are companies whose consumers should never require debt to purchase their products, including Uber and Spotify. Any revenue that Klarna drives to those companies comes from encouraging financial irresponsibility.

A study in the Journal of Retailing attempts to ascertain the reason why consumers may be more likely to spend when a BNPL payment option is available.³ The authors find that the key variable is the installment price. The ability to break a $100 purchase into two $50 payments is not as likely to encourage spending as the ability to break it into ten $10 payments. The study attributes this to the numerosity effect: we tend to judge values by the number of units they are expressed in without fully considering the size of the units. If I tell you that the Empire State Building is 1,250 feet tall, for example, it will “feel” bigger than if I say its height is 381 meters, even though those two numbers mean exactly the same thing. Likewise, a smaller installment payment causes less mental resistance than a big lump sum. 

Retailers using BNPL exploit a vulnerability in the psychology of money. Most consumers do not enter every single transaction into their pocketbooks. Instead, they decide whether or not to make a purchase based on whether they feel in their gut that they can afford it.⁴ It’s the cognitive friction imposed by a purchase, rather than any accounting of precise costs, that prevents us from spending more than we can afford to. Any gap between the felt price of a product and its actual price can therefore harm our financial health.

As such, economists have in the past urged consumers to avoid using credit cards if they are trying to maintain a budget.⁵ Debt makes the constraints on our resources feel less real. It’s easier to spend if you don’t have to worry about your card declining at the register. The rise of the "shopaholic," who spends beyond their means, can in part be explained as a failure of this gut-level accounting. BNPL accelerates that failure by design, making the felt price of a product substantially lower than its real one.

For younger consumers, that vulnerability is compounded by the social environment in which they make purchasing decisions. Instagram and TikTok present their users with a continuous stream of aspirational consumption, much of it from peers whose financial circumstances are opaque. Research on social comparison theory consistently finds that upward comparisons—measuring ourselves against those who appear to have more—generate both dissatisfaction and a motivation to close the perceived gap. 

In adolescence and early adulthood, when identity is still being consolidated, that motivation is especially strong. A young person who sees a peer wearing a particular brand of sneakers or carrying a particular handbag does not simply experience want; they experience a kind of social pressure that can feel indistinguishable from need. By lowering the cognitive barrier between that feeling and a purchase, BNPL makes it significantly easier to act on social anxiety rather than financial reality. The result is debt incurred not out of necessity but out of the desire to perform a lifestyle that social media has made to seem normative.

All of this is part of a larger trend, in which products and services increasingly operate by transferring the frictions of everyday life—the minor difficulties and irritations that are the price of normal existence—onto others. Same-day delivery services, for example, eliminate the annoyance of waiting for an item to arrive, but displace that friction onto warehouse and delivery workers. Large language models ameliorate the friction of having to write an essay or report, yet they generate localized environmental friction, straining the water supply in the communities that host their data centers.

As the economist Kyla Scanlon describes, the ability to displace friction has become an attractive product feature to consumers.⁶ Those with the resources to do so are willing to pay money to avoid mundane friction (for example, calling an Uber to avoid having to walk in the rain), but will also spend in order to experience attractive friction (signing up for a Pilates class).

Using BNPL is, in effect, a method of displacing friction onto our future selves. In the moment, it feels like a free reduction in friction, and yet the debt does not disappear. It accumulates quietly in the background, arriving later as a bill that the borrower must now pay out of income they have already mentally spent. For consumers who use BNPL habitually, this creates a structural lag between the enjoyment of a purchase and the financial reckoning it eventually demands. The friction has not been eliminated; it has been deferred and, in many cases, multiplied by fees and interest charges that apply when installments are missed.

The generational implications of this are significant. Young people who have grown up with BNPL available at every checkout screen are developing their financial intuitions in an environment specifically engineered to make debt feel unremarkable. Unlike a mortgage, which builds equity, or even a student loan, which is premised on a future return, the debt accumulated through BNPL is purely consumptive. It leaves no asset, no credential, and no lasting improvement in the borrower's circumstances. What it does leave is a dulled sensitivity to the real cost of borrowing, and a habit of financing present gratification with future resources.

None of this is an argument against BNPL as a financial instrument. For consumers who use it to manage cash flow across a genuine short-term gap, it can be a reasonable tool. The problem is that its design does not distinguish between that use case and the kind of impulsive, socially-driven spending that its checkout integration is built to encourage. Klarna's revenue model depends on the latter far more than the former. Until regulators require greater transparency about how these products affect spending behavior, and until financial education catches up with the sophistication of the products young people are using, the burden falls primarily on consumers to understand what BNPL is actually optimized to do—and to ask themselves, before splitting the payment, whether the friction they are avoiding might be friction worth keeping.