Buy now, pay later (BNPL) is a payment method that allows customers to purchase goods or services immediately and pay for them over time through instalments or deferred payments.
Instead of paying the full purchase amount upfront, the customer enters into an agreement with a BNPL provider, which pays the merchant and then collects payments from the customer according to an agreed schedule.
BNPL has become a popular alternative payment method (APM) in e-commerce, retail, travel, and other consumer-facing industries.
When a customer selects BNPL at checkout, the provider assesses the transaction and decides whether to approve the payment. If approved, the merchant typically receives payment from the BNPL provider, while the customer repays the provider over time. Depending on the product and provider, repayments may be split into several instalments or deferred. The customer experience is designed to integrate into the checkout flow, enabling financing decisions during purchase.
BNPL solutions can be structured in different ways, including:
The exact repayment model depends on the provider, market, transaction value, and applicable regulations.
Many businesses offer BNPL as an additional payment option to support customer preferences and provide greater payment flexibility.
BNPL can help merchants:
