Buy Now Pay Later: Regulatory Ambiguity And Consumer Protection

Author: Vaibhav Kashyap – a student of National Law University, Odisha.

BNPL (Buy Now Pay Later) is a point-of-sale credit that allows consumers to pay for goods over a small period while receiving such goods as if the payment was made upfront. Initially ignored as another form of installment-based credit, the BNPL market picked up during the course of Covid-19 pandemic. The BNPL market expanded by a huge 569% Y-O-Y in 2020 while it grew by 637% Y-O-Y in 2021. Though the amount disbursed through BNPL was only 0.73 % of total loans in the case of commercial banks and 2.07 percent in the case of NBFCs, the BNPL constituted 37% of the total number of loans disbursed for commercial banks and 11.91% of the total number of loans disbursed in the case of NBFCs. Therefore, while the customer base is very high, the amount disbursed is very small. This can be explained by the fact that BNPL schemes are highly popular on e-commerce sites where they credit small consumer