Buy Now, Pay Later (BNPL)

Buy Now, Pay Later (BNPL) refers to a financial arrangement that allows consumers to purchase goods or services and defer payment to a later date, often in installments. This payment model typically enables consumers to acquire items immediately while spreading the cost over a specified period, usually without interest if paid on time.

BNPL services are often offered at the point of sale, whether online or in physical stores. Consumers can select BNPL as a payment option, completing the transaction with minimal upfront costs. The provider of the BNPL service usually conducts a quick Credit assessment to determine eligibility.

For example, a shopper purchasing a $300 pair of shoes might use a BNPL service to pay $100 upfront and the remaining $200 in two subsequent monthly payments of $100 each. If the payments are made on time, the shopper incurs no interest.

Cases of BNPL usage can include:

• A furniture store offering a BNPL plan allowing customers to buy a sofa for $1,000, paying $250 now and $250 over the next three months.
• An online retailer providing a BNPL option for electronics, where a customer buys a $500 laptop, pays $125 at Checkout, and the remaining balance over four months.