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THE IMPACT OF BUY NOW, PAY LATER SERVICE ON THE ONLINE SHOPPING
BEHAVIOURAL INTENTION OF GENERATION Y AND GENERATION Z IN
HANOI

1
Pham Van Tuan* , Tran Thanh Huyen , Tran Thi Khanh Huyen , Nguyen Thi Tra My ,
2
3
4
Pham Lan Phuong 5
1, 2, 3, 4, 5 National Economics University, Hanoi, Vietnam.
(*E-mail: phamvantuan@neu.edu.vn)

ABSTRACT
Grounded in the S-O-R framework, mental accounting theory, and hyperbolic
discounting theory, this study develops and tests a model explaining how BNPL shapes
behavioral intention through cognitive and affective pathways while examining the
moderating role of financial literacy. The findings show that BNPL significantly enhances
shopping experience, strengthens mental accounting, and reduces pain of paying, which
in turn increases online shopping behavioral intention. BNPL also exhibits a modest but
significant direct impact on behavioral intention. Financial literacy negatively affects
shopping intention but positively moderates the relationship between BNPL usage and
intention.
Keywords: Buy now pay later (BNPL); online shopping behavioral intention; mental
accounting; pain of paying; financial literacy; satisfaction; Generation Y; Generation Z;
Vietnam

1. Introduction
According to FIS WorldPay (2025), digital wallets, credit cards, and debit cards
remain dominant in global e-commerce, though their usage is gradually declining.
Meanwhile, Buy Now, Pay Later (BNPL) rapidly grew, with global transactions exceeding
$342 billion in 2024, about 5% of total e-commerce spending. In Vietnam, BNPL shows
strong growth potential due to high mobile penetration and limited credit card access,
with credit cards only representing 5.5% of consumer credit (FiinGroup). BNPL's fast
approval, minimal documentation, and interest-free installments make it especially
appealing to Generations Y and Z (Cook et al., 2023). BNPL adoption in Vietnam rose from
17% in 2022 to 49% in 2025, with the highest use among those aged 25–34 (TGM Vietnam
E-commerce Report, 2025). The BNPL market is expected to grow 36.5% annually,
reaching $2.61 billion in 2025 and $8.51 billion by 2030 (Research & Markets, 2025).
Despite evidence that BNPL may increase consumer spending, research has not
conclusively explained how and why BNPL influences spending behavior compared with
traditional payment methods. Theoretical arguments grounded in prospect theory
(Kahneman & Tversky, 1979; Tversky & Kahneman, 1991, 1992) and mental accounting
theory (Thaler, 1985, 1999) even suggest conflicting predictions. Dividing a payment into
multiple installments may amplify the total perceived loss due to the convex value
function for losses. By this logic, the installment-based structure characteristic of BNPL
may intensify payment pain and thereby suppress spending behavior, rather than
stimulate consumption as commonly asserted. Although prior studies confirm that
payment fragmentation can amplify payment pain (Ma et al., 2025) and that this
perception reduces spending intentions (Ashby, 2019), few experimental studies have

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