Buy Now Pay Later

Need to buy something but don’t have all the money to pay for it upfront? Buy-now-pay-later (BNPL) allows shoppers to buy things today and pay for them, in instalments, over time.

This can be an attractive choice, as spreading out payments may make them more affordable especially if you weren’t expecting to have to buy something essential (for example, if a washing machine breaks down). And there’s something about paying a relatively small amount upfront and getting what we want immediately that appeals to people.

For example, if you’re buying something for €400, you might use BNPL and pay €100 when you check out, then make another payment of €100 a month later, another payment of €100 the next month and a final payment of €100 the next month. So, as long as you make the payments on time, you'll pay everything off in three months.

BNPL isn’t new. Some of us remember buying sofas and fridges by putting down a deposit at the till in the shop and paying the balance in instalments over time. Although the shop provided the goods, shoppers often had to sign a separate credit agreement with a specialist provider for the ‘pay later’ part.

Today, BNPL is often an option that pops up online when you go to check out on a retailer’s website. You might have to download an app to get BNPL from a specialist provider or simply click on a button on the web page.

Some providers charge you interest for BNPL, especially for larger purchases and if you want to spread the payments out over a number of years. Some don’t charge you interest, as long as you make payments on time. But see below for what happens if you’re late making payments.

Don’t click on the BNPL button if you’re planning to pay now using a credit or debit card. It can sometimes be the default payment option on some websites.

You may have to pay fees and charges, if you don’t pay on time. These vary depending on who you’re buying from and who provides the BNPL option.

Some providers may charge you no interest, even on late payments, but they may stop you from buying anything else using their BNPL credit.

Others may charge you fees if you’re late with a payment. These can vary. They should be set out in your BNPL credit agreement so remember to read it through carefully.

Some BNPL providers may allow you to freeze a payment so that you have more time to find the money for it. But they may charge you for doing this.

BNPL can be helpful if you need to buy something essential quickly and don’t have all the money you need to pay for it. Just make sure that you can afford the regular payments to avoid fees and charges for late payments, if they apply. Remember you might have less money available at Christmas, for example, but you’ll still need to find the scheduled BNPL payment.