What is BNPL?
BNPL, or Buy Now Pay Later, is the term for consumer financing that happens at the point of sale.
The consumer pays over time for their purchase, but takes the item(s) home with them immediately.
If you are a bank or lender, and want to learn more about Jifiti’s BNPL solutions for lenders, you can visit our Consumer Financing page for more information.
What are the differences between POS Lending and BNPL?
BNPL has become the generic term for all types of financing at the point of sale including:
- Point of sale financing including installment loans and lines of credit
- Split Pay
- Deferred Invoice
- Pay in 4
- Pay in 3 Installments
But really these options have many differences, for example:
- Point of sale financing is usually longer term and requires underwriting by the lender
- Split Payments is more of a payments option than a loan, requiring no underwriting by the lender.
Will my customer pay interest with BNPL?
There are two types of BNPL solutions with different interest implications:
- Merchant transaction fee BNPL – This type of BNPL solution is interest-free. Instead of the consumer paying interest, the merchant subsidizes the interest by paying a transaction fee. This interest-free solution is very typical of Split Payments BNPL products.
- Shopper Interest loan – With a point of sale BNPL loan, the customer is often charged some sort of interest rate or APR, depending on the term and length of the loan.