“Buy Now, Pay Later” — for Stocks?

By Matthew Milner, on Wednesday, February 7, 2024

In 1840, Singer Sewing Machines came up with a groundbreaking marketing strategy:

It started offering its sewing machines for a "dollar down, dollar a week."

The results were dramatic. Sales soared, as did consumer satisfaction. Other industries, from furniture to farm equipment, soon jumped on the bandwagon.

This was the start of what’s now called Buy Now, Pay Later (BNPL) — a type of short-term loan where consumers can purchase items today and pay for them over time.

Today I’ll show you a startup offering BNPL in a new way: to buy stocks.

Then I’ll reveal how investing in the startup itself could potentially help you earn returns of 10x or even 833x your money.

Something New: Commission-Free Trading

It’s tough for new companies to break into the financial-services industry.

The investment companies that most of us rely on — Schwab, Vanguard, Fidelity — have created powerful brands. Once we have assets there, there isn’t much incentive to switch.

But in 2013, something new came along: Robinhood.

Robinhood offered commission-free trading. This was a big deal. At the time, average commissions were $7 to $10 per trade. So if you invested $100 into a stock, the stock would need to go up about 10% just so you could break even.

Robinhood’s innovation was a huge marketing success. The company now has about 20 million funded accounts, 15 million monthly active users, and after going public in 2021, it currently has a market cap of about $10 billion.

But now another new company is aiming to break into financial services — and to do so, it’s following Robinhood’s playbook...

Following Robinhood’s Playbook

Robinhood made a splash in the industry by offering commission-free trading.

Now a new player on the scene is aiming to make a splash: Wolfpack Financial.


Wolfpack is a self-directed trading platform.

And to attract users, it came up with a disruptive new offering:

Buy Now, Pay Later for stocks!

As you might know, BNPL for e-commerce has caught on like wildfire. Perhaps you’ve seen it when buying items at Amazon, or Walmart, or anywhere else you shop online.

Essentially, after a small upfront payment, you can pay for an item over time. Such loans are easy to get approved for, typically charge no interest — and if you pay on time, BNPL won’t affect your credit score.

Klarna is the most popular BNPL service, with over 150 million active users, 500,000 merchants, and more than 2 million daily transactions. Other BNPL services include Affirm (Nasdaq: AFRM), which recently went public and is currently worth $13 billion.

But BNPL has never been used for buying stocks — at least, not exactly…

Disrupting the Margin Business

Just like your bank will lend you money against the equity you have in your home, your brokerage firm will lend you money against the value of your investment portfolio.

The money it lends you is called a “margin loan.”

You can use a margin loan for anything. But many people use it to buy additional stocks or securities. This enables them to leverage their holdings to build bigger portfolios. For example, if you have $10,000 in a margin account, you could potentially purchase up to $20,000 of stock.

The business of margin loans is huge. The U.S. stock market is worth about $14 trillion, and margin loans make up about $644 billion of it.

The thing is, margin loans can be risky for investors. For example:

  • They can amplify your losses if the stocks in your account go down in value.
  • If your equity falls below the requirements, you’ll get a “margin call” requiring you to deposit additional funds.
  • And if interest rates rise, the cost of your loan will increase.

Furthermore, many investors can’t qualify for a margin loan in the first place. Typically, you need a strong credit history, a minimum $2,000 deposit, and you need to fill out a complex application form.

Beyond that, most new investors aren’t even familiar with margin loans.

But you know what they are familiar with?

Buy Now, Pay Later!

BNPL for Stocks

Wolfpack’s BNPL product allows its customers to purchase stocks today, and then pay for them over 10 weeks.

For example, take the case of a 22-year-old woman named Amanda who just started her first job. Amanda doesn't have a FICO score, and she has just $500 in savings. So she wouldn’t qualify for a margin loan.

But with Wolfpack, Amanda could purchase, say, $200 worth of Apple stock — and an additional $200 of Apple stock using BNPL.

To repay the $200 of stock she bought using BNPL, she’ll need to repay $20 per week for the next 10 weeks. She can have the $20 deducted from her bank account each week, or Wolfpack will automatically sell down $20 worth of stock to cover the weekly repayment.

Like Robinhood’s introduction of commission-free trading, this could be a big deal. It’s an innovation that could lead Wolfpack to attract a huge number of young, new investors.

No Free Lunch

But is such a product actually good for consumers?

Wolfpack insists its service isn’t “predatory.” For example, it doesn’t charge fees or penalties for late payments, and it doesn’t extend the 10-week loan term.

But there’s no such thing as a free lunch. For example, it does charge interest and transaction fees at each repayment cycle, even when those repayments are on time.

My Opinion — and an Opportunity

I believe it’s rarely a good idea to go into debt for a nonessential purchase — whether the purchase is a new TV, or shares of Apple or Tesla.

So if you ask me, I wouldn’t recommend using margin or BNPL to invest in stocks.

That said, I don’t think my opinion on the subject will stop young investors from doing it. As Robinhood has proven, young investors like the “casino” aspect of investing, and it’s clear that their interest in “meme” stocks like GameStop helped Robinhood grow to new heights.

That’s why it’s possible Wolfpack will thrive as a company.

And now you have the opportunity to invest in it…

You see, Wolfpack is currently raising capital from investors like you. The valuation for the round is $12 million, and the minimum investment is $100.

Should you consider an investment?

Pros and Cons of an Investment

On the “pro” side:

  • It’s filed a patent to protect its innovation around BNPL for stocks.
  • Its team has deep domain experience.
  • It won the 2022 Benzinga Global Fintech Award for "Best Product for Beginners" (the 2021 winner was Robinhood).
  • And as mentioned earlier, it’s going after a huge market opportunity.

Given these pros, it’s possible Wolfpack could grow considerably in the future. If it’s successful, it could potentially deliver the type of returns we target for all of our startup investment: 10x. It could even deliver returns that are far higher. For example, if it reaches the same valuation as Robinhood, it could potentially deliver returns of 833x your money.

But there are “cons” here as well.

First of all, this is a tough and expensive industry to break into. Robinhood raised more than $5 billion before going public. And if Wolfpack’s BNPL product isn’t a hit, it’s unlikely the company will be able to survive and thrive.

And, of course, there’s also the moral issue to consider.

As mentioned earlier, I believe it’s rarely a good idea to go into debt for a nonessential purchase. And I wouldn’t recommend using margin or BNPL to invest in stocks.

I’m in favor of only buying what you can afford — and only investing what you can afford.

Despite Robinhood’s success in democratizing the world of investments, it’s taken the serious business of investing and “gamified” it. That leads to people risking their life savings.

But the truth is, Robinhood isn’t the only company that’s created a controversial service or product. For example, the same type of hand-wringing exists for companies like Facebook, which many believe is hurting teens and undermining democracy.

An Interesting Deal to Explore

This is why I’m not recommending that you go out and blindly invest in Wolfpack:

This is still an early-stage venture with plenty of risk, and plenty of room for moral discussion. So be sure to do plenty of research before making an investment decision.

But if you’re comfortable with Wolfpack’s focus on BNPL — and you believe it could attract a huge number of investors — this could be an interesting deal to explore.

You can learn more here »

Happy Investing

Please note: Crowdability has no relationship with any of the startups we write about. We're an independent provider of education and research on startups and alternative investments.

Best Regards,



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