TikTok bans Buy Now Pay Later (BNPL) advertising
Influencers and social networks are driving the spending of young people more than ever. For almost 18 months, shopping online with a few clicks has been a way of life – and it’s very easy to do.
Following the release of a new report, Shop Now, Stress Later for 2021, which reveals social media and influencers are guiding young buyers, TikTok, as a program to curb bad financial advice shared by influencers via the platform, deleted 11 million accounts from the app.
TikTok banned BNPL advertising from the app after reviewing these stats from the Shop Now, Stress Later report:
- One in twelve (8%) used BNPL because of influencers (up 42% year over year)
- One in eight (13%) aged 18-24 said influencers played a role in their decision to buy now and pay later (up 26% year over year)
- One in six (16%) say BNPL’s programs caused them to buy more than they could afford
- On average, BNPL platforms expect to be paid after 49 days, but the average consumer said it takes 261 days to pay, or 186 days of additional debt.
With the finances involved here, especially youth finances, these new TikTok rules are among the strictest yet.
Young buyers have proven to be particularly sensitive to the marketing tactics of BNPL brands. One in eight (13%) 18-24 year olds said social media influencers encouraged their decision to buy now and pay later. This figure is up a quarter (+ 26%) compared to 2020 data.
18-24 year olds are also more likely to use BNPL programs (54%) than a credit card (49%), as the marketing tactics employed by BNPL brands attract younger shoppers – TikTok is very aware of this.
James Andrews, Personal Finance Editor at argent.co.uk, said: “Our research shows that the marketing appeal of BNPL providers and the use of social media influencers continue to encourage buyers to sign up and potentially spend more than they can realistically afford. .
“It is positive to see a social media platform taking such a forward-thinking approach to the way financial information is provided, especially before formalized regulation of the BNPL sector comes into effect.
“While social media platforms can be useful for outreach and education, unfortunately they are mostly unregulated, which means anyone with an account can give financial advice. TikTok’s move to ban all financial services and products, including allowing influencers to promote cryptocurrency, stock trading, and buy-now and pay-after programs, is a step in the right direction .
With TikTok cracking down on advertising of BNPL programs to a question of accountability to its users, it will be interesting to see if other social media platforms used for influencer marketing take the same approach to encourage thoughtful spending after a turbulent financial period.