Buy Now, Pay Later (BNPL) Services in Online Shopping

Buy Now, Pay Later (BNPL) services in online shopping allow customers to purchase goods or services immediately and pay for them over time in instalments, often interest-free. These services have become increasingly popular, enabling consumers to split payments into manageable monthly amounts without upfront full payment.

Key features of BNPL services include:

• Payment splitting: Customers can divide the total purchase amount into equal instalments, typically monthly, over a set period (e.g., three months).
• No or low interest: Most BNPL providers charge no interest but may impose small administrative fees or late payment fees.
• Late fees: Fees for missed payments vary by provider and order amount, ranging from a few dollars to higher sums for larger purchases.
• Consumer protections: Some BNPL providers adhere to codes of conduct that cap late fees and limit outstanding balances to prevent consumer over-indebtedness.
• Wide merchant acceptance: BNPL can be used for a variety of products and services, from everyday consumer goods to higher-priced items.

Popular BNPL providers include Atome, Grab PayLater, Hoolah, SPayLater, and Singtel PayLater. Each offers slightly different terms, such as varying late payment fees and merchant partnerships. For example, Hoolah allows splitting payments over three months and charges late fees based on order size, from S$5 to S$30 per missed repayment.

BNPL services are not classified as loans or credit cards and are generally not regulated by traditional financial authorities, though industry codes of conduct are emerging to promote responsible lending and consumer protection.

The BNPL market is growing rapidly, with projections indicating significant increases in market value and user adoption, driven by convenience and flexible payment options for consumers.