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Buy Now Pay Later Vocabulary

Get the words of the BNPL world right with our Buy Now Pay Later vocabulary.

BNPL Vocabulary

API is short for Application Programming Interface. It is a software mediator that enables different software applications to communicate. Sileon’s card-linked BNPL SaaS Platform is API-based, in which two external APIs will be used to integrate the Platform into a bank, card issuer or fintech’s financial system.

B2B stands for Business to Business, meaning businesses sell their product or services (in this case, a Buy Now Pay Later service) to other companies. As BNPL is a form of short-term lending, B2B BNPL allows business buyers to defer payments or spread their costs when converting a purchase to an instalment plan.

B2B BNPL

B2C stands for Business to Consumer, meaning businesses sell their product or services (in this case, a Buy Now Pay Later service) directly to their consumers without an intermediary. As BNPL is a form of short-term lending, B2C BNPL allows consumers to defer payments or spread their costs when converting a purchase to an instalment plan.

B2C BNPL

BNPL is short for Buy Now Pay Later.

BNPL

A SaaS BNPL platform is built in modules. Modules that the user adds to its Buy Now Pay Later offering as their business and customer demands grow. 
A module can be a market or a credit product, that each come with many advanced settings. Settings to suit different consumer behavior, market regulations, laws or payment preferences. The combinations are endless so combining these modules and settings makes up for a Buy Now Pay Later platform that is very sophisticated and technically complicated.

BNPL modules

A BNPL Platform allows banks, card issuers, and fintechs to offer their end users the possibility to better manage their finances by purchasing items or services and paying for them later. The BNPL Platform is either built in-house or integrated into the financial system by a BNPL software supplier, like Sileon. 
When using Sileon as a BNPL software supplier, card businesses can go to market with a card-linked B2B or B2C BNPL offering under their own brand. Besides, by adding Solution modules to the BNPL Platform, card businesses can shorten the time to market and easily scale their BNPL offering to reach a broader customer segment. In contrast to building a BNPL Platform in-house, partnering with Sileon will allow card businesses to stay relevant for their customers while saving significant time, budget and resources.

BNPL Platform

Buy Now Pay Later, offered as a Software as a Service.

BNPL SaaS

Buy Now Pay Later (BNPL) is a type of short-term financing allowing consumers to make purchases immediately and pay for them later, normally through a series of instalments. The financing solution is issued for purchases at any Point of Sale (POS), whereas the consumer’s funding approval is instantly performed. 
BNPL can also be used on post-purchases, meaning an already completed payment can be retroactively converted into a BNPL product. 
Unlike traditional credit card purchases, where consumers are charged interest for every month of carried balance, BNPL financing is normally offered with no or little interest.

Buy Now Pay Later

Card-linked BNPL refers to Buy Now Pay Later options applicable for cards, whether credit, debit or any other card type. Adding BNPL to the existing card base complements a bank, card issuer or fintech’s existing card base. It enables them to launch a B2B or B2C BNPL offering to reach a broader audience and increase revenue.

Card-linked BNPL

Consumer credit enables consumers to buy items and pay for them later, as well as defer the payments for these items. In other words, consumers take on a personal loan to purchase items or services. These often represent an alternative to instalment payments. Consumer credit applies to all types of consumer lending, but the term is mainly used for smaller amounts, i.e., not collateralized.

Consumer credit

Credit card-linked BNPL means adding Buy Now Pay Later options to the credit card, enabling end users to convert completed purchases to instalment plans.

Credit card-linked BNPL

Debit card-linked BNPL means embedding Buy Now Pay Later options to the debit card, enabling end users to convert completed purchases to instalment plans.

Debit card-linked

Embedded finance refers to financial products or services that non-financial companies offer. It’s designed to streamline financial processes for customers and give them instant, easy access to relevant financial services at the point of interaction. BNPL is one type of embedded finance.

Embedded finance

An instalment is a type of BNPL product. In this arrangement, card issuers can choose to have the execution of the payment claim on a fixed day each month while retaining the freedom to select the length of the total amount of instalments they wish to provide to the end user (e.g., a four-month instalment). This feature can be of high value for the end user since it provides a clear understanding of their monthly payment obligations. The end user will, for example, receive the invoice on the same date every month, which makes it easier to plan finances and budget effectively.

Fixed monthly instalments

Flexible instalment is an instalment payment model that offers additional flexibility to lenders. With flexible instalments, lenders can choose the length of the total period as well as the number of instalments they wish to provide within certain predefined limits. The conditions are defined in the payment terms set in Sileon’s Portal when creating the BNPL product. This option allows lenders to tailor their payment schedule according to their business and market needs, giving their end users more flexibility and control over their budget.

Flexible instalments

Instalment is a type of BNPL product. It refers to a payment arrangement where customers have the option to divide their total purchase amount into multiple smaller payments over a specified period. Instead of paying the entire amount upfront, customers can make partial payments at regular intervals until the whole sum is settled. In turn, lenders have the flexibility to add different fees and interests. Two different instalment options are available for configuration in Sileon’s Platform: Flexible and Fixed monthly.

Instalment

Instalment loans are considered unsecured loans. Historically, they have mainly been used for more costly purchases in-store. However, today this option is available for most purchases online with a Buy Now Pay Later option at checkout, regardless of price. 
When you take out an instalment loan in the name of Buy Now Pay Later (also known as point-of-sale financing), you immediately receive the product you bought. When paying the amount back to the retailer, you can spread the cost over a set number of payments, known as instalments. The repayment schedule can differ depending on the BNPL offering.

Instalment loans

For Sileon, a lender is defined as a financial institution (bank, card issuer or fintech) that uses Sileon’s card-linked BNPL SaaS Platform to create BNPL offerings under its own brand. This allows the lender to offer multiple payment options to its customers in order to provide the best customer experience.

Lender

With modular access, the BNPL offering can extend further. The modules, placed on top of the platform, can be added successively as the business and customer demands grow. A module can, for example, reflect a market or a credit product. With modular access, the user purchases only as many modules as they need to serve their demand at any given time.

Modular access

Pay later allows consumers to buy now and pay later. It is a safe and secure payment method for online shoppers that doesn&#8217;t affect the consumer&#8217;s credit score. It attracts no fees or interest as long as payments are made in due time. 
The amount of the purchase are paid back in one or a series of installments set by the merchant. 
Usual pay later options are Pay in 30 days, Pay in 3 and Pay in 4.

Pay later

Pay in 30 days is a Buy Now Pay Later payment plan. It allows the consumer to receive their order up front and get up to 30 days to pay without any interest or fees. Shoppers have the option to pay off the balance early or at due date. Some merchants offer their customers to push the payment date forward if needed, for at set number of days, attaching a small fee. 
Using pay in 30 days a soft credit check is performed, however this does not affect the consumer&#8217;s credit score and will not be visible to other lenders.

Pay over time

There are many types of payment methods used across different countries. As consumer behaviour and technology evolve, new payment methods arise, and others decline in use. The most common payment methods are cash, credit cards, debit cards, direct debits and bank transfers, digital wallets and Buy Now Pay Later.

Payment methods

POS means point-of-sale, as at the time of the purchase. POS financing describes methods for giving online consumers flexible, pay-over-time instalment options. POS lending can be offered by banks or any other type of financial institution. 
POS lending is mainly used by consumers purchasing more expensive goods and services. Interest, fees and payment schedules vary with the size of the loan and the loan issuer. A POS loan may require a credit check.

POS Financing

SaaS stands for Software as a Service. It is a cloud service, a type of IT-service offered and provided over the internet. SaaS is thus a distribution model for software programs. These software programs, or apps, run directly through the web. No downloads or installations is needed.

SaaS

A SaaS (Software as a Service) platform is a digital platform that can be accessed from any online device. The software is hosted in the cloud and is accessed through a user subscription.

Saas platform

Software as a Service, SaaS, is a cloud service, a type of IT-service offered and provided over the internet. SaaS applications can be accessed from any internet connected device and used for a variety of tasks.
Traditionally, software has been bought on CD-ROMs demanding a physical installment to one device at a time, limiting the software licence to a set number of devices and users allowed to use the software.
Software as a Service users subscribe to the software instead of buying it, often on a monthly basis. The applications are bought and used online and files are usually saved in the cloud instead of on individual computers.

Software as a Service

The Solution modules serve as extra capabilities to the BNPL SaaS Platform with the main purpose of simplifying and shortening time to market, as well as increasing the flexibility, regardless of whether the focus is on B2B or B2C. The Solution modules are elective and can easily be added or removed depending on the card business’s needs.

Solution modules

Split payment is a single payment of a total purchasing amount split into two or more equal transactions.

Split payment

A white-label BNPL service, like Sileon’s, means you can run your BNPL under your brand name and not the brand you purchase the service from. A white-label BNPL service suits any card business wanting to offer BNPL to their end users without developing internal BNPL systems.

White-label BNPL service

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BNPL Vocabulary

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