APT Chart, page-1627

Normally I wouldn't address your points but one element that interested me is that to understand the popularity of BNPL, one needs to put it against credit cards.

As you pointed out, cards make revenue by charging interest rates. For this reason cards issuers won't stop you from getting into bigger debt as long as it's within limit. BNPL makes revenue from merchants and the late fee is generally not enough to cover average balance and so it has the incentive to stop people from getting into debt. Young generation prefers this as a budgeting tool over cards.

Another aspect is cards were designed few decades ago where paperwork was still prevalent. It wasn't possible for banks to lend out a small amount of $100 in large volume so it's sensible to seek customers credit history and if acceptable, give them a line of credit with limit. These days we all have mobiles and a large amount of data can be entered, stored and fetched in a split of a second. The best way for small consumer lending is to lend them a small amount and check their credit through 'action', i.e. whether they would pay back. The convenience of using BNPL is way superior than credit cards for the mobile-and-social-media -addicted generations.

It's also funny that you complained that BNPL causes financial stress for customers with an average balance of $150 while $2000 interests from credit cards is 'not a great deal of money'....