Regulators Focus On AI-Powered Surveillance In Buy Now, Pay Later Industry

In recent quarters, the financial services industry has been buzzing with discussions about regulation parity in the Buy Now, Pay Late sector, and its implications for both consumers and merchants. While the spotlight often falls on the financial aspects of BNPL, such as high interest rates, late fees and greater financial stress on consumers, one critical issue that deserves more attention is the data harvesting and digital surveillance of consumers by the BNPL industry. This under-the-radar concern has far-reaching implications, prompting regulators to step in and address this growing problem.

BNPL has experienced rapid growth in recent years, leveraging open APIs, cloud technologies, and, most notably, artificial intelligence to enhance the ability to target potential buyers. The AI revolution, which is progressing at breakneck speed, presents both opportunities and risks. In the wrong hands, the vast amount of data collected by BNPL firms could not only jeopardize merchants but also severely impact consumers. As worries about consumer protection continue to grow, it is only natural that regulatory oversight becomes an integral part of the BNPL landscape. Merchants should remain vigilant and stay abreast of the changing dynamics in digital surveillance within this evolving environment.