The Psychology of BNPL Repayment Procrastination: Behavioral Insights on Present Bias and Financial Motivation

Abstract

The rapid growth of Buy Now, Pay Later (BNPL) services have transformed consumer financing, particularly among younger demographics. However, concerns about repayment procrastination have been observed to persist. Unlike traditional credit systems, BNPL offers instant approval, flexible installments, and low entry barriers, creating unique behavioral dynamics that merit dedicated investigation. Therefore, this research aimed to examine BNPL repayment procrastination through the lens of Temporal Motivation Theory (TMT), focusing on three key components, namely present bias, value (reward), and delay (installment period). To achieve the research aim, survey data were collected from 134 active BNPL users in Indonesia and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The obtained results show that present bias significantly increased BNPL repayment procrastination, while perceived value (reward) does not directly reduce it. Furthermore, delay (installment period) is found to positively contribute to procrastination but does not moderate the relationship between present bias and procrastination. The insignificant moderating effects of value and delay suggest that long-term BNPL users may not prioritize rewards when postponing repayments. The results also show that financially stable users with fixed incomes and short-term installment preferences are less likely to procrastinate, while those with high outstanding balances or longer installment plans face greater risks. This research extends the application of TMT in a fintech context and provides practical insights for improving BNPL risk assessments, designing repayment schemes, and promoting financial literacy.