You find the perfect $200 jacket. You click “Pay in 4.” $50 today.

$50 later. $50 after that.

$50 after that. Easy.

But here's the strange part. You are not the only customer in that transaction. The retailer is a customer too.

And the BNPL ( Buy Now, Pay Later) company may have several different ways to make money from the same purchase. That little button that looks like a convenience feature can actually sit in the middle of a surprisingly complicated financial machine.

The shopper sees: “Four easy payments.” The BNPL company sees: Merchant fees. Credit. Interest. Loan sales. Servicing. Advertising. Affiliate commissions.

And the retailer sees something even more interesting: “Maybe this gets the customer to actually buy the $200 thing.” That's the business story.

Subscribe to keep reading

This content is free, but you must be subscribed to Penny Brief to continue reading.

Already a subscriber?Sign in.Not now