What the new "buy now, pay later," rule means for small businesses offering the service
“Buy now, pay later” services are a popular way that shoppers pay for goods
NEW YORK (AP) — “Buy now, pay later” services are a popular way that shoppers pay for goods.
The payment plan is usually marketed as zero-interest, or low interest, and allows consumers to spread out payments for purchases over several weeks or months.
Because shoppers like the service, offering it can be a plus for a small business. But since the payment plan is offered by third-party companies — such as Affirm and Klarna — there can be risks involved too.
If something goes wrong, consumers could blame the small business — even if they have nothing to do with the payment plan. And things can go wrong. A report from the Consumer Financial Protection Bureau in 2022 found that more than 13% of BNPL transactions involved a disputed charge or a return. In 2021, consumers disputed or returned $1.8 billion in transactions at five large BNPL firms, the CFPB said.
