Back in 2020 I spent a couple months laying low in Argentina. Daily life in Buenos Aires, on the surface, wasn’t all that different from daily life in any other big city in Europe or North America. People spend time at home with their families and go out with their friends. Some neighborhoods are fancy and some are rough. The subtle differences were the most interesting: different cars on the road that I had never seen in the US, the bus as the standard mode of long-distance travel, young people living with their parents longer. Grocery stores advertise splitting the bill into a few equal payments.
If you had been more familiar with Argentina’s difficult economic history than I was, you probably wouldn’t have been as surprised to see the store offer to finance your groceries. I had never really seen anything like this before. Credit cards exist, and I’ve seen furniture stores offer no- or low-interest payment plans. I get it: furniture is a big captial expense, and it’s in the store’s best interest to reduce the friction involved in making that sale. Applying that logic to a big grocery haul felt like a window into the typical Argentine family’s financial circumstances.
Fast forward a few years, and Buy Now, Pay Later platforms are exploding throughout my own beloved economy. We can finance dinner on DoorDash, pay off large purchases over as many as thirty-six months at Walmart, and yes, split the grocery bill into six payments. All that in addition to the how the real Klarna heads can finances purchases directly through the Klarna app itself.
The most obvious analysis of this news is as another nail in the coffin of the American consumer. So simultaneously strapped for cash and addicted to buying that we now need to finance our chicken tenders and invent new financial products to afford buying dinner for our families, damn the consequences. And, you know what, fair enough — that’s at least partially true. That’s the take I’ve seen most frequently. But I suspect that it may also be true that these companies, global experts at exploiting impulsivity and convenience, are seeing demand for their products falter for the first time in a while. Meanwhile customers, facing economic uncertainty of their own driven by layoffs, inflation, tariffs, and the rest make different choices in 2025 than they did in 2022. It could be that more people are tightening the belt by cooking more at home picking up their takeout themselves, and those already doing their own cooking are coming home with less as inflation pushes prices higher.
At the same time, these behemoth consumer brands continue optimizing every aspect of the customer experience to create a friction-free chute down which you slide without even realizing. The shipping’s free, the driver’s only twenty minutes away, the fees are waived, it’s on sale, they take Apple Pay and you don’t even have to enter an address or credit card number anymore. Now, they’re attacking the last little bit of friction left: the friction associated with actually spending your own money. If you were already toying with the idea of a $40 DoorDash dinner for one, the fact that it’s only $10 today and the rest is due at some point in the future is probably enough to push you over the edge, given the time value of money and all.
Of course DoorDash is happy to offload the risk of financing an overpriced delivery meal to a third party if it makes their metrics look even slightly better. They’re hollowing out their future prospects to prop up immediate results (hey, just like the customer!) in the hopes that the economy at large will turn around and absolve these sins before the wave crashes (wow, really just like the customer). Confronting the reality that they’re running out of things to optimize while saddling their best customers with debt that will eventually render them unable to buy their products is a job for the next guy, some time after the current guy cashes out his equity and retires.