Core Considerations For Out-of-Network BNPL Payments

Much has been written about the Buy Now, Pay Later (BNPL) industry in the recent past. Consumers enjoy the payment flexibility and interest-free features of many BNPL products and frequently use them as a substitute payment method for credit card purchases. The rapid growth of BNPL has attracted the attention of the media and various regulators. The Consumer Financial Protection Bureau (CFPB) released a report on the BNPL industry last fall covering the rise of the industry and consumer protection concerns (among other things), and opened an inquiry into five BNPL providers in 2021.

The CFPB report largely covers the typical BNPL arrangement where consumers can use the product to make purchases from any merchant in the BNPL provider's network. Although referenced in the CFPB report, use of the product for purchases at merchants outside a BNPL company's existing network has received relatively little attention. These out-of-network transactions make it easier for