Glossary
Buy now, pay later (BNPL)
Buy now, pay later, BNPL, is credit offered at the checkout by a provider such as Klarna: the provider pays the merchant the full amount, minus a fee higher than a card's, and collects from the payer in instalments or after a delay. The payer gets credit without a card application; the merchant gets a bigger basket and no credit risk; the provider carries the default risk and earns the merchant fee and late fees. Refunds go through the provider, which adjusts the payer's plan.
How the flow works
The payer chooses BNPL on the checkout, is redirected to the provider or authenticates inline, passes the provider’s instant credit decision, and returns with the order approved. The merchant ships against the provider’s confirmation; the provider settles on its schedule. Returns and partial refunds are reported to the provider so the payer’s instalments change.
Where it stands
Regulators in the UK, the EU and Australia are bringing BNPL under consumer credit rules with affordability checks and disclosures; providers are becoming licensed lenders and payment institutions. For merchants the method remains a conversion tool for baskets above a certain size and in categories such as fashion and electronics.
On the platform
Tranzify lists BNPL providers in the catalogue where they operate; the hosted checkout runs the provider’s redirect flow, the status model records the provider’s approval and settlement, and refunds are sent to the provider through the same terminal.
Updated: 2026-11-08