BuyNowPayLater

Buy now, pay later (BNPL), sometimes written as buynowpaylater, is a form of consumer credit that allows shoppers to purchase goods and defer payment. Most BNPL plans offer a short-term agreement, with installments due over weeks or months. In many cases, interest-free financing is available if payments are made on time, while late payments or longer-term plans may incur fees or interest.

BNPL transactions typically begin at checkout when a consumer selects the BNPL option. A quick application or soft credit check is often performed to determine eligibility, and approval is usually instant. The total purchase price is divided into scheduled payments, which are automatically charged to the consumer’s payment method. Merchants pay a fee to BNPL providers, in return for offering the service to customers. Providers bear some credit risk, while consumers are expected to meet payment obligations according to the schedule.

The BNPL landscape grew rapidly in the 2010s and 2020s, with early prominent players based in different regions. It expanded from online commerce to physical retail and across various markets, driven by e-commerce growth and consumer demand for flexible payment options. Common repayment models include four installments over six weeks, or longer-term plans that spread payments monthly.

Benefits cited for merchants include higher conversion rates and larger average order values, while consumers may experience greater purchasing flexibility and easier budgeting. Critics warn of potential for increased debt, aggressive marketing to younger shoppers, and insufficient long-term affordability checks. Privacy and data-use concerns have also been raised, given the data BNPL providers collect to assess eligibility.

Regulation varies by jurisdiction, with many regulators considering BNPL as consumer credit requiring disclosures, licensing, or affordability assessments. In some regions, additional protections and clearer credit reporting standards are being introduced to address consumer risks.