Buy now, pay later, known better as BNPL, is the hottest trend in finance these days. Consumers are using this method to purchase everything from Christmas gifts to airline tickets. Some are even using it to pay for HVAC work.
So how does it work? These are essentially point of sale retail installment plans. Consumers make a down payment, usually 25%, and then make further payments over a set period of time. It’s similar to layaway, except the consumer receives their purchase upfront. It’s also essentially the way homes and cars have been financed for decades.