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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

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

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

BNPL SaaS

Buy Now Pay Later is a type of short-term financing allowing consumers to make purchases at one point in time, and pay for them at a future date. 
This payment method is a lending process that involves consumers, financiers, and merchants. When consumers shop with a merchant, financiers instantly pay merchants on behalf of the consumer. The consumers then repay the financiers over time in equal installments. The number of installments and repayment period varies depending on the BNPL financiers.

Buy Now Pay Later

Consumer financing is also known as customer financing, and happens when a merchant offers its customers financing options using their own funds, or the funds of a bank or lending company. In doing so the retailer allows the consumer to purchase a product they wouldn&#8217;t want to, or be able to pay for up front. 
Offering consumer financing can be very valuable for a merchant as it tends to boost conversion, raise order values and increase customer retention.

Consumer financing

Installment financing is considered a type of unsecured loan. Historically it has been used mainly for more costly purchases in store but 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 installment loan in the name of Buy Now Pay Later (also known as point-of-sale-financing), you immediately receive the product you bought. Paying the amount back the retailer lets you spread out your payments over a set number of payments, known as installments &#8211; where the repayment schedule differs depending on the merchant&#8217;s offering.

Installment loans

Buy Now Pay Later installment loans are interest free. There is no option to add debt, there are no hidden fees and zero interest.

Interest free loans

A lender is a bank or financial institution that makes funds available to a person or business with the condition that funds are repaid including any interest or fees. Repayment can be made in one single payment of divided into installments.

Lender

A merchant is a company that sells goods and services. In digital means, an e-commerce.

Merchant

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 for example a market or a credit product, and with modular access the user purchases only as many modules they need to serve their demand at any given time.

Modular access

Pay in 3 is a concise way of saying that a consumer can split their payment into three simultaneous payments when shopping with an online retailer. This is a payment method within Buy Now Pay Later giving shoppers more time to pay. It attaches no fees (when payments are made in due time) or interest and it doesn&#8217;t impact the buyer&#8217;s credit score. The purchase amount will be withdrawn from the credit- or debit card the customer have registered with the retailer or payment provider.

Pay in 3

Pay in 4 is short for splitting a purchase into four payments. This is a payment method within Buy Now Pay Later giving shoppers more time to pay. It attaches no fees (when payments are made in due time) or interest and it doesn&#8217;t impact the buyer&#8217;s credit score. The purchase amount will be withdrawn from the credit- or debit card the customer have registered with the retailer or payment provider. 
A usual payment set-up for pay in 4 is one payment every two weeks.

Pay in 4 installments

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 develops over time, new payment methods arise and others decline in use. The most common ways of payment 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 in time of purchase. POS financing describes methods for giving online consumers flexible, pay-over-time installment options. POS lending can be offered by banks or financial institutes.
POS lending is commonly 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

Split payment is exactly what it sounds like. A single payment of a full purchasing amount split into two or more equal transactions.

Split payment

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BNPL Vocabulary

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

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