Buy Now, Pay Later as a dual financial instrument: evidence from Saudi Arabia

Buy Now, Pay Later (BNPL) has rapidly expanded as a deferred payment service in consumer finance. However, evidence remains limited on its association with both perceived benefits and financial risks, as existing studies have often examined these dimensions separately. This study examines the association between BNPL usage frequency and consumer-reported outcomes among users in Saudi Arabia, focusing on perceived benefits and potential risks across six outcomes: financial well-being, purchasing power, overspending, personal debt accumulation, missed-payment risk, and post-purchase regret. The analysis is based on survey data collected from 219 BNPL users and employs binary and ordered logistic regression models estimated with and without demographic controls for robustness. The findings reveal dual financial outcomes associated with BNPL usage: while frequent use shows suggestive associations with higher perceived financial well-being and increased purchasing power, it is more consistently linked to greater overspending and higher levels of personal debt. BNPL usage is not significantly associated with missed-payment risk after controlling for demographics, nor with post-purchase regret. Overall, the results suggest that BNPL usage is associated with both perceived benefits and potential risks. These findings underscore the importance of responsible digital credit use and offer insights for policymakers, fintech providers, and consumers.