What is buy now, pay later?
Buy now, pay later (BNPL) is a checkout option that lets a shopper receive goods immediately and pay later, usually in four interest-free installments or in one payment after 14 to 30 days. A BNPL provider pays the merchant upfront and collects the repayments.
In detail
Buy now, pay later (BNPL) is a checkout option that lets a shopper receive goods immediately and pay later. The most common formats are four interest-free installments, or a single payment 14 to 30 days after purchase. Longer financing plans exist too, usually with interest.
The BNPL provider pays the merchant upfront, minus a fee, and collects the repayments from the shopper. The provider carries the credit risk and the collection work, so the merchant is paid as for any other payment method.
Why merchants ask for it
Shoppers who prefer to spread a purchase, or to pay after receiving the goods, may choose a merchant that offers BNPL over one that does not. In many markets, local BNPL providers are part of what shoppers expect at checkout, alongside cards and wallets.
What it means for payment operators
For PSPs, PayFacs and platforms, BNPL is a payment method to activate per market, not a product to build. On white-label infrastructure, each BNPL provider is connected through a contract, appears at checkout under your brand and flows into the same reporting as cards. Your merchants choose which providers to offer, market by market, and you avoid maintaining one integration per provider.