What is ‘Buy Now, Pay Later’ & How Does it Work?

According to Juniper Research, there are an estimated 360 million Buy Now Pay Later users worldwide.  

Buy Now, Pay Later (BNPL) refers to the ability to pay for goods or services over a period of time. The practice has been around for a long time but is becoming more popular as millennials and other consumers seek out new ways to pay their bills. Although this payment option has not yet been rolled out in the Caribbean, it is important for merchants to be aware of this new payment trend. 

Although the process might vary between merchants, the steps are generally as follows: 

  • The consumer selects a product or service to buy and finds out that it offers deferred payment plans.
  • They are asked to provide their personal information and select a payment method (like bank account details).
  • The merchant processes the order, which could involve requesting additional information from you if they need it (such as proof of income).
  • After receiving payment authorization from your bank or credit card company, they will ship your order to your home address or have it sent directly to your workplace if applicable (for example, if you’ve purchased an item for work).

Step 1: The customer selects items on a site and places them in their cart. 

For a shopper to buy items using the buy now, pay later option, they must first select an item from a site. This can be done in a variety of ways. It may require clicking on an image or text link or watching a video advertisement before the product is shown to them. The customer then adds this item to their cart by selecting it with a mouse click and dragging it into an empty space next to other products they wish to purchase. Once an item has been added to the cart, additional items can be added by repeating this process until all desired products have been selected. 

Step 2: The customer indicates that they would like to use a Buy Now, Pay Later payment option on checkout. 

The customer will be asked to provide their email address and access to their bank account. If the customer has previously provided their payment information, they may receive an invitation to use this option again. 

Once a Buy Now, Pay Later transaction has been initiated by a retailer, the customer will not be able to cancel or change their order until it has been delivered successfully.  

Step 3: A payment processor processes the customer’s information and determines whether or not they are approved for financing (this happens within seconds). 

The information provided by the customer is processed by a payment processor, who contacts the customer’s bank to find out whether the customer is authorized for financing. Similar to how credit card payments are processed, this process is also completed within seconds!  

Step 4: If the customer is approved for financing, the merchant can then complete their checkout and ship their products. 

Once a customer has been approved for financing, the merchant can then complete their checkout and ship their products. 

Merchants get paid as soon as they ship their products. This means that you won’t have to wait until your order is paid off in full—you can get paid right away! The payment processor usually handles customer payments until they are paid off. Once the loan has been repaid in full, all remaining funds will be released back to you. 


Buy Now Pay Later is a simple way to allow customers to pay over time. 

Buy Now Pay Later is a simple way to allow customers to pay over time. It can be used for any purchase, from furniture to electronics and beyond. Customers can choose how much they want to purchase with each payment, and the instalment period will be customized based on the price of their item(s).