Buy now pay later (BNPL) is a sort of short-term financing that allows consumers to make purchases and pay for them at a later date. There are a different models for BNPL products. Generally these are categorised into split pay, pay later, long-term financing at 0% annual percentage rate, longer-term financing with subsidized interest or fee. Distribution channels for BNPL include merchant checkout, merchant platforms, multi-lender networks, bank credit cards and white label providers (customised store credit cards). The arrangements for BNPL have become increasingly popular with both merchants and customers. Such widespread adoption has led to increasing regulatory scrutiny although in some jurisdictions self-regulation through industry codes have been the preferred route. Regulators are concerned that consumers may not fully understand the implications of entering into a BNPL scheme.
In our latest issue of Regulation Around the World we consider regulatory developments in the BNPL space in over 14 jurisdictions including the UAE.