Project – The Influence of Buy-Now-Pay-Later Services on Financial Discipline Among Young Consumers in Lagos State. A Study of CDcare

CHAPTER ONE

INTRODUCTION

Research Topic: THE INFLUENCE OF BUY-NOW-PAY-LATER SERVICES ON FINANCIAL DISCIPLINE AMONG YOUNG CONSUMERS IN LAGOS STATE: A STUDY OF CDCARE

1.1 Background to the Study

The development of financial technology has significantly transformed the way individuals access financial services, make payments and manage their personal finances. Traditionally, consumers depended on cash payments, bank transfers, savings and conventional credit facilities to purchase goods and services. However, the advancement of digital technology has introduced innovative payment arrangements that allow consumers to acquire products and settle payments over an agreed period. These developments have contributed to the emergence of digital financial services, including mobile banking, electronic wallets, digital lending and Buy-Now-Pay-Later (BNPL) services. Buy-Now-Pay-Later is a form of short-term consumer financing that enables individuals to obtain goods or services immediately while spreading the payment across instalments over an agreed period. This arrangement has become increasingly attractive to consumers who may not have sufficient funds to make immediate full payments for desired products. According to the Bank for International Settlements (2020), financial technology innovations have continued to reshape financial intermediation and consumer payment behaviour, creating new opportunities as well as challenges for financial inclusion and consumer protection. Consequently, BNPL services have become an important subject in discussions concerning digital finance, consumer spending and personal financial management.

Buy-Now-Pay-Later services have gained attention because they provide consumers with flexible payment arrangements that can make relatively expensive products more accessible. Unlike traditional consumer credit, which may require formal loan applications, extensive credit assessments and interest payments, some BNPL providers offer simplified registration and instalment arrangements. Consumers can select products, agree on payment schedules and spread the purchase cost across weekly or monthly instalments. This flexibility may help individuals manage immediate financial needs, particularly when purchasing electronic devices, household appliances, educational equipment and other essential items. However, the convenience of deferred payment may also encourage consumers to make purchases without adequately considering their existing financial commitments and future income. The possibility of obtaining products without paying the full purchase price immediately may weaken spending restraint among individuals who lack effective budgeting practices. Guttman-Kenney, Firth and Gathergood (2023) explain that the expansion of BNPL has raised important questions about consumer borrowing, affordability and the potential financial consequences of using deferred payment arrangements.

Financial discipline is an important aspect of personal financial management because it involves the ability of individuals to control their spending, prepare budgets, save consistently, meet financial obligations and make responsible purchasing decisions. A financially disciplined individual considers income, expenses, savings and existing financial commitments before making financial decisions. Financial discipline also involves avoiding unnecessary purchases, controlling impulsive spending and ensuring that borrowed or deferred payment obligations do not exceed one’s financial capacity. The importance of financial discipline becomes particularly significant among young consumers because this group often experiences changing financial circumstances, developing spending habits and increasing exposure to digital purchasing opportunities. Lusardi and Mitchell (2014) explain that financial literacy plays an important role in individuals’ ability to make informed financial decisions and manage financial resources effectively. Similarly, the Organisation for Economic Co-operation and Development (2020) emphasises the importance of financial knowledge, attitudes and behaviour in promoting responsible financial decision-making. Therefore, the relationship between BNPL services and financial discipline deserves attention, particularly among young consumers who are increasingly exposed to digital payment innovations.

Young consumers represent an important segment of the digital financial services market because of their familiarity with smartphones, online marketplaces, electronic payment platforms and social media-based commercial activities. In Lagos State, young people participate actively in digital commerce and frequently encounter opportunities to purchase products through online platforms and flexible payment arrangements. The increasing cost of living, changing consumer preferences, employment uncertainties and limited disposable income may also influence the financial decisions of young individuals. For some young consumers, BNPL services provide an opportunity to obtain products that might otherwise be difficult to purchase through a single payment. Nevertheless, the availability of instalment payment options may create a tendency to prioritise immediate consumption over long-term financial planning. Young consumers who do not carefully evaluate their income and future obligations may accumulate several instalment commitments, resulting in difficulties meeting payment deadlines and maintaining regular savings. The study by Yong and Gengatharen (2023) found that financially responsible behaviours are associated with financial wellbeing among BNPL users and that younger users, particularly those below 25 years, may face greater risks of reduced financial wellbeing when responsible financial behaviours are lacking.

In Nigeria, the expansion of digital financial services has created new opportunities for consumers to access financial products and purchase goods through technology-enabled platforms. The growth of e-commerce, mobile banking, electronic payment systems and digital retail services has changed how consumers interact with businesses and manage transactions. Buy-Now-Pay-Later services have emerged within this changing financial environment, offering consumers alternative ways of financing purchases without necessarily obtaining conventional bank loans. One of the platforms operating in this area is CDcare, a Nigerian retail instalment platform that enables customers to purchase products and pay through weekly or monthly instalments. The platform offers products such as electronic devices, household appliances and other consumer goods through structured payment arrangements. According to CDcare (2026), customers can select available products, choose payment schedules and complete their purchases through instalment payments, with delivery eligibility determined by the applicable plan and verification requirements. This business model illustrates how BNPL services are becoming part of Nigeria’s evolving consumer finance environment and provides a relevant institutional context for examining the financial behaviour of young consumers.

The use of BNPL services may influence financial discipline in several ways, particularly in relation to budgeting, savings, spending habits and repayment behaviour. On the positive side, instalment payments may encourage consumers to plan purchases, distribute expenditure over time and avoid making large immediate payments. When properly managed, such arrangements may help individuals organise their financial commitments and acquire necessary products without disrupting their entire monthly income. However, BNPL services may also encourage excessive consumption, impulsive buying and the accumulation of multiple payment obligations. Consumers who focus primarily on the affordability of individual instalments may fail to consider the combined value of their outstanding commitments. This may lead to delayed payments, reduced savings and financial pressure when other essential expenses arise. Yong and Gengatharen (2023), in their study on responsible financial behaviours and financial wellbeing among BNPL users, established that responsible financial behaviours are important to the financial wellbeing of consumers using these services. Their findings suggest that the financial consequences of BNPL depend not only on the payment arrangement but also on the financial decisions and behavioural practices of users.

Despite the potential benefits of BNPL services, concerns have emerged regarding their implications for consumer financial wellbeing, particularly among younger users. The ease of accessing instalment payment arrangements may reduce the immediate psychological impact of spending and make consumers more willing to purchase products that they might otherwise postpone or avoid. Where consumers lack effective budgeting skills, financial awareness and repayment discipline, BNPL usage may contribute to overspending, inadequate savings and difficulty meeting financial obligations. In Nigeria, the Federal Competition and Consumer Protection Commission (FCCPC) has introduced regulatory measures addressing digital and non-traditional consumer lending, including the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations 2025, to promote transparency, responsible conduct and consumer protection in the digital credit environment. These developments demonstrate the growing importance of responsible digital financial practices and the need to examine how emerging payment services influence consumer behaviour (FCCPC, 2025). It is against this background that this study seeks to examine the influence of Buy-Now-Pay-Later services on financial discipline among young consumers in Lagos State, using CDcare as a case study.

1.2 Statement of the Problem

The growing adoption of Buy-Now-Pay-Later services has introduced new opportunities for consumers to access products through flexible payment arrangements. However, the increasing availability of these services has also raised concerns about their possible influence on responsible financial behaviour, particularly among young consumers. Although BNPL services are designed to make purchases more convenient by allowing consumers to spread payments over time, the arrangement may encourage individuals to acquire products without adequately considering their income, existing expenses and future financial obligations. Young consumers who have limited financial management experience may be particularly vulnerable to impulsive purchasing decisions and excessive spending. The availability of products through instalment payments may create the impression that goods are more affordable than they actually are, thereby encouraging consumers to commit to purchases beyond their financial capacity. Guttman-Kenney, Firth and Gathergood (2023) observed that BNPL use is particularly prevalent among younger consumers and raised concerns about their ability to manage the financial obligations associated with deferred payments.

Another problem concerns the possible effect of BNPL services on budgeting and savings habits among young consumers. Financial discipline requires individuals to allocate their income appropriately between consumption, savings and other financial responsibilities. However, when consumers engage in multiple instalment purchases, a considerable portion of their future income may become committed to repayment obligations. This may reduce the amount available for savings, emergency expenses and other essential needs. Consumers may also find it difficult to maintain a consistent budget when several payment deadlines occur within the same period. Research by the Consumer Financial Protection Bureau (2023) found that BNPL borrowers were more likely than non-users to have higher levels of indebtedness, revolving credit card balances and other indicators of financial distress. These findings raise concerns about whether the convenience of BNPL services may undermine effective financial planning and savings behaviour among young consumers.

Furthermore, the growing use of digital instalment payment platforms raises concerns about repayment discipline and the ability of young consumers to fulfil their financial commitments. Some consumers may underestimate the cumulative burden of instalment payments, particularly when they use different payment arrangements or purchase several products simultaneously. Failure to make scheduled payments may expose users to additional charges, restrictions, product recovery or other consequences depending on the provider’s terms and conditions. In the case of CDcare, the platform provides weekly and monthly instalment arrangements, with specified repayment schedules, delivery conditions and consequences for missed payments. These conditions make repayment behaviour an important consideration in assessing the financial discipline of its users. Although the availability of structured instalment arrangements may encourage planned purchasing, it remains necessary to establish whether young consumers possess the budgeting ability and financial self-control required to manage such commitments responsibly (CDcare, 2026; Consumer Financial Protection Bureau, 2025).

Despite the increasing availability of BNPL services in Nigeria, there is a need to understand their actual influence on the financial discipline of young consumers, particularly within Lagos State. While existing international studies have examined BNPL usage, consumer indebtedness and financial wellbeing, their findings may not fully explain the experiences of young Nigerian consumers operating within a different economic and financial environment. In particular, there is a need to investigate how the use of CDcare influences spending habits, budgeting practices, savings behaviour and repayment discipline among young consumers in Lagos State. It is also important to determine whether BNPL services encourage responsible financial planning or create opportunities for excessive consumption and financial commitments beyond consumers’ capacity. The absence of sufficient context-specific evidence on these issues creates a research gap that this study intends to address. Therefore, this study examines the influence of Buy-Now-Pay-Later services on financial discipline among young consumers in Lagos State, using CDcare as a case study.

1.3 Objectives of the Study

The main objective of this study is to examine the influence of Buy-Now-Pay-Later services on financial discipline among young consumers in Lagos State, using CDcare as a case study.

The specific objectives are to:

1. Examine the influence of CDcare’s Buy-Now-Pay-Later services on spending habits among young consumers in Lagos State.

2. Determine the influence of CDcare’s instalment payment arrangements on budgeting practices among young consumers in Lagos State.

3. Assess the influence of CDcare’s Buy-Now-Pay-Later services on savings behaviour among young consumers in Lagos State.

4. Examine the influence of CDcare’s repayment arrangements on financial responsibility and repayment discipline among young consumers in Lagos State.

1.4 Research Questions

The following research questions will guide the study:

1. How do CDcare’s Buy-Now-Pay-Later services influence spending habits among young consumers in Lagos State?

2. To what extent do CDcare’s instalment payment arrangements influence budgeting practices among young consumers in Lagos State?

3. How do CDcare’s Buy-Now-Pay-Later services influence savings behaviour among young consumers in Lagos State?

4. To what extent do CDcare’s repayment arrangements influence financial responsibility and repayment discipline among young consumers in Lagos State?

1.5 Research Hypothesis

The following null hypothesis will be tested in the study:

H₀: Buy-Now-Pay-Later services have no significant influence on financial discipline among young consumers in Lagos State.

1.6 Significance of the Study

This study will be significant to the following groups:

Young Consumers

The study will help young consumers understand how Buy-Now-Pay-Later services influence their spending habits, budgeting practices, savings behaviour and repayment responsibilities. It will create awareness of the importance of financial discipline when using instalment payment platforms. The findings will encourage young consumers to evaluate their income, financial commitments and purchasing decisions before subscribing to BNPL services. It will also help them understand the possible consequences of excessive spending and failure to meet repayment obligations.

CDcare Management

The study will provide useful information to CDcare management on how its instalment payment services influence the financial behaviour of young consumers. It will help the organisation understand consumers’ spending patterns, repayment behaviour and challenges associated with instalment payments. The findings may assist management in improving consumer education, payment plan communication and responsible purchasing practices among its customers.

Financial Institutions and Fintech Companies

The study will be beneficial to financial institutions and financial technology companies offering digital payment and consumer financing services. It will provide insights into the relationship between flexible payment arrangements and consumer financial discipline. The findings may encourage service providers to develop responsible financial products, improve customer awareness and promote payment arrangements that support sustainable financial behaviour.

Government and Regulatory Authorities

The study will provide useful information to government agencies and regulatory authorities responsible for consumer protection and financial regulation. It will highlight the importance of promoting responsible digital financial services and protecting young consumers from potentially harmful financial practices. The findings may also assist regulatory institutions in developing consumer education programmes and policies that encourage responsible use of instalment payment services.

Parents and Guardians

The study will help parents and guardians understand the financial behaviours of young consumers and the possible implications of deferred payment arrangements. It may encourage them to educate young people on budgeting, saving, spending control and responsible financial decision-making.

Researchers and Students

The study will serve as a useful academic reference for students and researchers interested in financial technology, consumer behaviour, financial literacy, personal financial management and digital payment systems. It will also contribute to existing literature by providing evidence on the relationship between BNPL services and financial discipline among young consumers in Lagos State.

1.7 Scope of the Study

The study focuses on the influence of Buy-Now-Pay-Later services on financial discipline among young consumers in Lagos State, using CDcare as a case study.

The content scope covers four major areas: spending habits, budgeting practices, savings behaviour and repayment discipline. It examines how the availability of instalment payment arrangements influences consumers’ purchasing decisions, ability to control expenditure, commitment to savings and willingness to fulfil financial obligations.

The geographical scope is Lagos State, Nigeria, while the population of interest comprises young consumers who use or have used CDcare’s instalment payment services. The study will focus on respondents who fall within the selected age range for young consumers and have relevant experience with the platform.

1.8 Limitations of the Study

The study may encounter certain limitations during the process of data collection and analysis. One possible limitation is the unwillingness of some respondents to disclose accurate information about their financial activities, spending habits, savings and repayment experiences because of the personal nature of such information.

Another limitation may be difficulty in obtaining adequate responses from young consumers who have used CDcare’s instalment payment services. Some respondents may also provide incomplete or inaccurate information about their experiences.

Financial constraints and limited time may further affect the researcher’s ability to reach a wider population across Lagos State. However, these challenges will be addressed through appropriate data collection procedures, clear explanations of the academic purpose of the study and assurances of respondents’ confidentiality.

1.9 Operational Definition of Terms

Buy-Now-Pay-Later (BNPL): A financial arrangement that allows consumers to obtain goods or services immediately and pay for them through instalments over an agreed period.

Financial Discipline: The ability of an individual to manage financial resources responsibly through proper budgeting, controlled spending, regular savings and timely settlement of financial obligations.

Young Consumers: Individuals within the selected youth age category who purchase goods and services and participate in digital payment or instalment financing arrangements.

CDcare: A Nigerian retail instalment payment platform that enables customers to purchase products and pay through structured weekly or monthly instalments.

Spending Habits: The patterns and decisions individuals demonstrate when purchasing goods and services and allocating their available income to consumption.

Budgeting Practices: The process of planning and allocating income to different financial needs, expenses, savings and other obligations.

Savings Behaviour: The willingness and ability of individuals to set aside part of their income for future financial needs rather than spending all available resources.

Repayment Discipline: The ability and willingness of consumers to meet agreed payment obligations within the stipulated period.

Financial Responsibility: The practice of making informed financial decisions, controlling expenditure and managing financial commitments according to one’s financial capacity.

Instalment Payment: A payment arrangement in which the total cost of a purchased product is divided into smaller amounts payable at agreed intervals.

Project – The Influence of Buy-Now-Pay-Later Services on Financial Discipline Among Young Consumers in Lagos State. A Study of CDcare