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Buy Now Pay Later

What is Buy Now Pay Later?

Buy Now Pay Later (BNPL) lets you spread the cost of purchases over time, either interest‑free for smaller amounts or with interest and a credit check for higher‑value goods. This page explains how BNPL works, what fees and late charges may apply, how agreements are regulated in Ireland and the risks to your credit record if payments are missed.

Always read the agreement carefully and track your repayments. Missing payments can result in extra costs, debt collection and make it harder to get credit in the future. Compare providers and make sure you understand all conditions before you sign up.

How does Buy Now Pay Later work?

Buy Now Pay Later (BNPL) is a credit agreement offered by many businesses when shopping online or in-store. The shop and the BNPL provider are usually different companies. When you use BNPL, you enter a separate contract with the credit provider. BNPL can sometimes appear as the default payment option online, so double-check before you select it.

Traditionally, BNPL was used for larger goods like appliances or furniture, but now it’s available for smaller items like clothing and footwear.

What payment options are available with BNPL?

For goods under €500, you may be offered interest-free instalments, paid fortnightly or monthly over three to six months. Another option is a single interest-free repayment within 14 or 30 days of purchase. Payment options vary by provider.

For goods costing €500 or more, you can usually spread payments over six to 36 months. These agreements require a credit check and may charge interest. Some BNPL providers are regulated high-cost credit providers who charge higher interest rates than banks or building societies. Use the CCPC Loan comparison tool to compare and look at other options for borrowing.

What fees and charges should you watch out for?

Fees and charges vary by provider and payment method. Always read the BNPL agreement’s terms and conditions.

  • Some providers charge no interest, even on late payments, but may block further purchases
  • Others charge late fees, which should be clearly set out in the agreement
  • Some providers allow you to “snooze” a payment for a fee

Example 1:
You buy shoes for €20 but miss a payment instalment. You are charged a late fee of €5 (for orders under €25).

Example 2:
You buy shoes for €150 and miss a payment instalment. The late fee is capped at 20% of the order so you pay a late fee of €30 (20% of €150). If the shoes cost €200, the late fee is capped at €35. 

The examples above are for illustration purposes only – actual late payment fees will vary depending on the BNPL provider.

If you get into difficulty and your debt remains unpaid under a BNPL credit agreement, then it can be passed to a debt collection agency who will pursue you for the debt.

How is BNPL regulated in Ireland?

Since 2022, BNPL providers need to be authorised by the Central Bank of Ireland and are subject to the Consumer Protection Code. You should be provided with enough time during the transaction to make sure that you can consider whether this is the right product for you before you enter into a credit agreement under BNPL. 

Providers must check affordability and suitability, and interest rates are capped at 23% APR (unless provided by moneylenders). You can complain to the Financial Services and Pensions Ombudsman (FSPO) if you have issues with a BNPL provider.

How do credit checks affect BNPL agreements?

Any credit agreement that is €500 or more may be reported to the Central Credit Register by the BNPL provider. If your BNPL agreement is reported to the Central Credit Register, it will be visible to other lenders.

What are the pros and cons of BNPL?

Pros:

  • Easy to use at online checkouts
  • Simple account setup
  • Lets you buy now and pay later
  • May require less stringent credit checks than traditional loans
  • Some providers offer interest-free borrowing if paid on time
  • Can be cheaper than credit cards if used correctly

Cons:

  • May encourage impulse buying – consider using savings instead
  • You could spend money that you don’t have or take out credit without planning
  • Missed payments mean late fees and higher costs
  • Paying interest means you pay more than buying outright
  • Missed payments can affect your credit rating
  • “Try now, pay later” can lead to paying for goods you don’t need if you miss the return window

What tips should you remember with BNPL?

  • BNPL is a form of credit
  • Double-check the payment option before buying online
  • Missed payments can affect your credit rating
  • Unpaid BNPL debt can be sent to a debt collection agency
  • BNPL agreements of €500 or more may be reported to the Central Credit Register
  • Know the late fees and keep track of what you owe
  • Know how many different BNPL credit agreements you have
  • Track repayment dates, especially if you have multiple BNPL agreements

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