Financial Glossary

Buy now pay later

Definition

Buy Now Pay Later is a financing option that allows consumers to purchase products or services upfront and pay the amount in installments over time, often interest-free if payments are made on time.

Related Services

Offered by e-commerce platforms, retailers, and fintech companies. Services include credit assessment, payment processing, and customer financing solutions.

Problem and Application

While BNPL drives sales and improves customer acquisition, it can lead to debt accumulation for consumers and credit risk for providers. Businesses use BNPL to increase conversion rates and average order values while fostering customer loyalty.

Conclusion

BNPL has revolutionized consumer purchasing behavior, offering flexibility and convenience. However, responsible usage and clear terms are critical to balancing benefits and risks for both consumers and businesses.