Are there any ways to make sustainable fashion more affordable? Yes, BNPL

Is it more likely that you will buy sustainably if it is more affordable? Sophie Benson, a writer, explores the phenomenon that conscious labels are using buy-now-pay later strategies and what this means for sustainability.

Any alternative to fast fashion can feel costly when you consider that you can get it for pennies. This is especially true as we all struggle to cut our spending during a cost-of living crisis. According to a survey, «It’s too costly» is the most common reason people give for not living a sustainable lifestyle. It’s not surprising, then that many people say they would be more inclined to shop and live sustainably if there were more eco-friendly options available.

A growing number of sustainable brands offer buy now, pay later (BNPL), which allows customers to spread out the costs of their products. Lucy & Yak, Nudie Jeans and Mara Hoffman are just a few of the sustainably-minded brands offering BNPL through Afterpay, Clearpay, and Klarna.

Lucy & Yak is a Brighton-based company. Yak is one of these brands that offers buy now, pay later plans.

Lucy Greenwood, Lucy & Yak’s co-founder, says, «We’re always looking for ways to be inclusive brands, so we wanted customers to have a BNPL option. This will make it more accessible to people who are looking to responsibly buy new clothes, who might otherwise be put off by price tags.» Yak has seen its prices rise over the last year because of the rising price for organic cotton.

Many people are now taking advantage of BNPL offers by brands. Research suggests that 24% people in Europe use such schemes. BNPL payments will account for almost 25% of global ecommerce transactions in 2026, up from 9% in 2021.

Elizabeth Stiles, a fashion consultant and expert in the fashion industry says «»f the sustainability option were cheaper or at the same price as non-sustainable products, I don’t believe there would be any problem with people changing their behaviour. «BNPL has a positive side to it. It can help restore that lost sense of value. Although you wouldn’t spend $200 on a dress made ethically and fairly, splitting it into four payments equals $50 makes it more affordable.» GWI reports that consumers who use BNPL more often are more inclined to pay more for ecofriendly products. 62% of BNPL users stated they would.

Research shows that 24% of Europeans use such schemes. By 2026, BNPL payments will account for almost 25% of global ecommerce transactions. This is an increase from 9% in 2021.

BNPL not only makes products more affordable, but it also makes credit more accessible. It has been called predatory because Gen Z are its most important users.

«Because BNPL can be so easily accessed and so simple, it’s easy to lure people in. Olga Miler is co-founder of Smart Purse, a financial wellness platform. We have seen people start to struggle with the organization of multiple BNPL programs. They are then trapped in these schemes after they have spent more than they can afford. This leads to a vicious cycle that results in them falling into a downward spiral of debt collection, bad credit scores, and all the negative consequences.

Miler does believe that BNPL is a valuable financial tool. It’s more useful than overdrafts or short-term credit, provided you manage it responsibly. She says that instalments must fit within your budget’s timeframe. Miler states that you should read all the fine print to understand what financial commitments you are making. BNPL is a relatively new type of credit. It charges the retailer or brand, not the customer, and it remains interest-free. This makes it a more affordable option than other forms of credit. It’s easy to forget or dismiss that you’re making a financial commitment because it’s embedded in checkouts.

There have been concerns about brands and BNPL providers not being accountable. This has resulted in a stronger regulation. The government announced in June 2022 that lenders would be required to make sure loans are affordable. Additionally, rules will be changed to prevent misleading advertisements. The Financial Conduct Authority will approve lenders, and borrowers can complain to the Financial Ombudsman Service.

Despite the existence of more regulations, many people are still unsure if BNPL is compatible with sustainable fashion values.

«I see a problem when these brands use these mechanisms to push more stuff onto consumers.» Miller says that responsible and sustainable fashion brands should not be using these mechanisms by default. Klarna suggests that Klarna Instalments can result in a 68% increase for retailers in order value and a 20% increase for Klarna Pay in 30 days.

Stiles believes there are other positives to leveling the playing field. She says, «If you can purchase a $15 dress through Klarna and the $200-pound brands are refusing to say no, then they’re not offering people a better choice.»

With more brands adopting BNPL and stricter regulations, it is clear that BNPL will not be going away. It can result in consumers spending more on more eco-friendly fashion, as shown by the numbers. It seems that the question will change from «Should sustainable brand use BNPL?» and «How can they apply it responsibly?»