The idea
Present bias describes giving extra weight to an immediate outcome relative to later ones. It can affect take-up and repayment decisions, alongside liquidity constraints and other factors. Daily packs or loans alone do not establish present bias. Show total repayment, fees and timing at purchase, and assess affordability and repayment outcomes.
Use it thoughtfully
- Deliver bonuses instantly rather than later.
- Show total cost at purchase for pay-later offers.
- Set loan fees and limits from repayment data.
An example
ILLUSTRATIVE EXAMPLE: An airtime loan screen shows the fee and total repayment in large text before the customer confirms.
A question to try
Does every pay-later offer you run show the full cost before the customer confirms?
A useful framework is a starting point, not a guarantee. Effects vary with the audience, product and situation. Use truthful evidence, respect customer choice, and test the result.