The Invisible Obligation: BNPL, Economic Precarity, and the Regulatory Conditions of Debt Erasure

Abstract

This thesis examines how BNPL platforms operate within structural economic precarity through a comparative case study of Australia, Sweden, and India. The central argument is that BNPL works through a mechanism termed debt–erasure which is the removal of debt as a word, a concept, and a legal obligation from the environment in which the decision to use the product is made. The form this takes depends on regulatory exposure. Where credit classification is absent, erasure is embedded into the legal contract itself and where the regulations do exist, it persists at the user experience level. Klarna, Afterpay, and LazyPay were analysed across platform and legal documents. Two findings show how debt erasure operates at opposite ends of the regulatory range. LazyPay’s 27-page General Terms contract, governing a consumer credit relationship in one of the world’s fastest-growing BNPL markets, contains no mention of “repayment,” “due date,” “missed payment,” or “CIBIL.” Afterpay's General Terms, which were updated June 2025 under Australia's new credit regulatory regime, use standard obligation terminology throughout. But nine months later, Afterpay's platform still describes the product as “the opposite of traditional credit products.” This regulatory gap has consequences beyond consumer protection, because BNPL is not classified as credit, so it falls outside monetary policy transmission. Cornelli et al. (2023) find that fintech credit grows fastest in high-inflation, low-regulation environments which is precisely where monetary tightening is supposed to slow consumption but simply cannot reach in the case of BNPL. The structural conditions like stagnant wages, informal employment, and the substitution of household debt for fiscal demand management that enable this, are explained using Standing's (2014) precariat framework and Crouch's (2009) concept of privatised Keynesianism.