The Behavioral Limits of Financial Literacy : Self-Control and Risk Perception as Pathways to Buy Now Pay Later Adoption

Abstract

Purpose - This study examines whether financial self-control and perceived risk mediate the relationship between financial literacy and Buy Now Pay Later (BNPL) adoption among Generation Z consumers.

Design/methodology/approach - Data were collected from 364 Generation Z consumers at four Indonesian universities through a hybrid online–offline survey using quota sampling. The data were analyzed using partial least squares structural equation modeling (PLS-SEM).

Findings - The findings show that financial literacy has no direct effect on BNPL adoption. However, it significantly influences financial self-control and perceived risk, which mediate the relationship between financial literacy and BNPL adoption. These findings indicate that financial knowledge alone does not determine BNPL adoption; behavioral self-control and risk perception are important pathways.

Practical implications - The findings suggest that financial education should not focus only on financial knowledge but also develop consumers’ self-control and ability to assess credit risks. BNPL providers and policymakers can use these insights to support responsible borrowing and strengthen consumer protection.

Originality/value - This study shows how financial literacy influences BNPL adoption through behavioral mechanisms rather than through a direct relationship. It highlights the importance of self-control and risk perception in understanding BNPL adoption among Generation Z consumers.

Keywords: Buy Now Pay Later; financial literacy; financial self-control; perceived risk; Generation Z