Understanding Post-Purchase Regret in the Era of FinTech: The Role of Buy Now Pay Later and Impulsive Buying Behaviour

Abstract

Purpose: With digital payment technologies rapidly evolving, including the rise of Buy Now Pay Later services, the purchasing habits of consumers have changed, leading to new psychological dynamics of digital transactions. This study aimed to explore the effect of Buy Now Pay Later (BNPL), Digital Financial Literacy (DFL), and Spendception on the Impulsive Buying Behaviour (IBB) and Post Purchase Regret (PPPR) of young consumers. In addition, the mediating effect of impulsive buying and the moderating effect of contextual factors in these relationships are explored.

Design/methodology/approach: This study was of quantitative type and primary data was collected using a structured questionnaire from 300 young consumers (university students, alumni and early career employees) of selected universities and private organizations of Pakistan. The measurement items were derived from previously developed measures on 5-point Likert scale. Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to analyse the collected data by using SmartPLS software.

Findings: BNPL, digital financial literacy, and Spendception are found to be significant positive factors towards impulsive buying behaviour. The findings also showed that impulsive buying had a strong relationship with post-purchase regret, providing evidence that people's spontaneous purchases can lead to a negative post-consumption emotion. The mediation analysis revealed that impulsive buying is a significant mediator between the relationships of BNPL, digital financial literacy, Spendception and post-purchase regret. Furthermore, the high moderating effects suggest that the effects of factors associated with digital payments on impulsive buying depend on certain individual and contextual factors.

Implications: The results offer significant policy implications for both the policymakers and fintech service providers, e-commmerce platforms and educational institutions, as they highlight the importance of fostering responsible digital payment habits, enhancing digital financial literacy, making digital payments more transparent, and building awareness among consumers about the dangers of excessive impulse spending and post-purchase regret.

Originality/value: This piece of research falls into the growing body of literature exploring digital consumer behaviour, as it brings together BNPL, digital financial literacy, and the novel Spendception, into one framework to clarify the concept of impulsive buying and regret following a purchase. This study sheds light on both mediating and moderating pathways and contributes to our understanding of the financial and psychological consequences for young consumers of digital payment innovations beyond the scope of the behavioural finance and consumer behaviour theories that have been previously studied.

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