Buy Now, Pay Later (BNPL)

Buy now, pay later (BNPL) allows consumers to obtain goods or services upfront and pay in installments. Its use is gradually expanding beyond e-commerce checkout to banking apps, travel and physical retailers. Regulators in several jurisdictions have recently stepped up oversight, with U.S. state legislation and new rules focusing on borrower protection. Providers including Klarna, Affirm and Block are expanding through bank charter applications, cross-border partnerships and integrated services. As demand grows, key issues to watch include protections for subprime borrowers, credit risk, data governance and providers' ability to turn a profit.