Buy Now Pay Later (BNPL) is a financial product that allows people to split or delay payments. BNPL works like credit or a deferred payment and is provided free of interest. BNPL providers cover their costs by charging commission fees to shops or by applying late payment fees to consumers. BNPL was initially offered by FinTech companies but increasingly now also by banks.

Like credit, BNPL can help consumers make short-term expenditure but comes with the same risks of over-spending and over-indebtedness. The market for BNPL is growing rapidly (particularly during the pandemic). BNPL is very popular among younger consumers when shopping online. According to a study from BEUC’s Danish member Forbrugerrådet Tænk , 16% of young people between 18-30 in Denmark already used BNPL, 44% of them to buy a phone and 40% to buy shoes and clothes.  Some providers, however, specifically target vulnerable consumers struggling to buy food.