Buy now, pay later (BNPL)
A point-of-sale loan that splits a purchase into a few installments, often four payments over six weeks with no interest.
What buy now, pay later is
Buy now, pay later (BNPL) is a short-term installment loan offered at checkout, online or in store. The shopper pays part of the price upfront and the rest over a few weeks or months. It is a common form of embedded lending: the lender pays the merchant upfront and collects the installments.
How it works
At checkout, the shopper picks BNPL and gets a quick credit decision, often after a soft credit check. The provider pays the merchant, charges it a fee, and collects the installments from the shopper. Longer plans can carry interest.
- 01 · APPLY The shopper chooses BNPL at checkout and gets a quick credit decision.
- 02 · FUND The lender pays the merchant, and the shopper makes the first payment.
- 03 · REPAY Remaining installments are charged on a set schedule, often every two weeks.
When businesses use it
- Retailers offering installments at online and in-store checkout
- Sellers of higher-priced goods, such as furniture or travel, offering longer monthly plans
- Single-use virtual cards that let shoppers use BNPL at many merchants that take cards
- Bills such as rent, utilities or medical costs split into installments
Cross River works with lending programs on consumer and small business credit, including point-of-sale installment loans. It provides bank-supervised origination with loan-level underwriting review, funding and loan sales to investors. See marketplace lending at Cross River.