BNPL

BNPL (Buy Now, Pay Later) is short-term installment credit issued at checkout — typically 4 equal payments every two weeks, interest-free for the customer. Klarna, Afterpay, and Affirm are the category leaders. The economics work because the merchant pays a higher fee than a normal card (4-6% vs 2-3%), betting that BNPL lifts conversion and average order value enough to offset it. For the customer it's effectively a mini-loan with no credit check beyond a soft pull, which is why regulators are starting to treat it like credit rather than a payment method — it bypasses traditional credit scoring and can stack across merchants invisibly.