Buy Now, Pay Later

What is “Buy Now, Pay Later”?

Buy Now, Pay Later, also known by its abbreviation BNPL, is a financing method that allows consumers to purchase products or services and postpone payment for a specific period of time.

With this new payment system, customers can acquire and enjoy the products or services, and pay in convenient installments that are usually predetermined, such as 30 days, 60 days, or 90 days, although it may vary depending on the provider.

How does “Buy Now, Pay Later” work?

The BNPL payment method is offered to the customer during the checkout process, alongside other available payment options.

1. If the user selects this option, they must choose the installment plan that suits them best, according to the options offered by each provider (for example, payment over several weeks or months, with or without interest).
2. Go through an automatic credit assessment conducted by the BNPL provider and provide any additional documentation required in specific cases.
3. Complete the purchase if the service is approved. Once approved, the merchant receives the payment upfront, and the BNPL provider manages future payments from the customer, protecting the merchant from risk and fraud.

Advantages of “Buy Now, Pay Later”

The main advantages of the Buy Now, Pay Later method include:

• Greater flexibility and convenience for customers

This payment method allows customers to make purchases without paying upfront. It gives them the option to enjoy products and services before making a payment, creating a more flexible and convenient experience. It also allows customers to better manage their cash flow by deferring payments and keeping money available for other immediate financial needs.

• Increase in average ticket value for merchants

Offering this purchase option can lead to a higher average transaction value. Customers may choose to buy higher-value products or services since they can pay later. It may also encourage customers to purchase more items, resulting in an increase in the average ticket value for merchants.

Factors to consider before using “Buy Now, Pay Later”

Consumers should use this type of financing responsibly, ensuring they make payments on time to avoid accumulating debt or facing long-term financial problems.

More information about “Buy Now, Pay Later”

For more information about the Buy Now, Pay Later method, check out these articles:

• Buy Now, Pay Later: what it is and its advantages