Buy Now Pay Later, How Does It Work?

buy now pay later

Itching to buy an item on your wishlist, but it’s not payday yet? Hey, there’s a solution to your shopping dilemma! Why not buy now, pay later? In case you’re not too familiar with how the “buy now, pay later” (BNPL) service works, this article breaks down its process, benefits (and precautions), as well as BNPL options for you to try.

How Does Buy Now, Pay Later Work?

At a glance, the buy now, pay later service is almost like a credit card payment. It’s a type of installment loan in which your transaction will be divided into several equal payments. As the customer, you will have to pay these payments each month. However, not all BNPL providers have the same system and regulation. Some charge interest and late fees, while others are laxer. But all share the same DNA; BNPL is accessible using a mobile app.

BNPL is primarily available in e-commerce though you may find it in several offline stores. During checkout, you can choose the pay later option. You will be asked to fill in a short form that details your personal information. Within seconds, the system will do a soft credit check and gives approval. Once it’s done, all you have to do is pay the first installment at the cashier.

For example, you’ve decided to buy running shoes for RM 450. Using a pay later app, your purchase is divided into three installments, and you have to pay RM 150 per month. At the checkout, you must pay RM 150 as the first installment. This means that you’ll have to pay RM 150 the next month and another RM 150 the following month. The transaction is complete, and you get to bring home a new pair of shoes. 

Pros and Cons of BNPL

It’s a new, convenient payment option for customers. However, is it safe to use BNPL for every transaction? Can it make you fall into mountains of debt? To answer these questions, let’s unpack the pros and cons of buy now, pay later service!


  1. Makes shopping easier: You can buy now and pay later if you’re short on cash. Since there are pay later apps that offer interest-free services, you literally have nothing to lose. It’s free money!
  2. Fast approval process: It only takes seconds. The registration process is also swift and easy to follow. You need to have your identity card, phone number, and bank account.
  3. An alternative for credit cards: There is no need to worry about your credit score as BNPL providers don’t do credit checks. Unlike credit cards, you won’t be charged with annual fees.
  4. Auto charge feature: This is excellent news for forgetful people. BNPL providers usually set an auto-charge feature where they automatically deduct the payment from your registered bank account.


  1. It may increase your impulse buying: You’ll be spending money that you don’t currently have. If you have tendencies to buy things that you don’t necessarily need, you may want to think over your decision to use the pay later app.
  2. Beware of late fees: In most cases, late payment fees cause BNPL users to fall into debt. This is how BNPL players earn their revenues.
  3. May impact your credit score: Although BNPL doesn’t affect your credit score directly, many loan providers also check your payment history in pay later apps.
  4. Limited control over payment date: Usually, the pay later app automatically sets your purchase date as your payment date. For instance, if you make your purchase on February 18th, then your payment will be on every 18th.

BNPL Players in Malaysia

Interested in trying the buy now, pay later service? You can try pay later Malaysia apps like Atome, hookah, SPayLater, and PayLater by Grab. Atom is the largest BNPL provider in Asia, partnering with over 2,000 retailers like Zalora, Agoda, Sephora, and Starbucks.

Similar to Atome, you may also find hookah attractive with its low penalty fees. SPayLater may be more suitable for online shopping lovers though it charges a processing fee. Lastly, PayLater by Grab offers 4-month tenure and is helpful to fund your daily needs. 

As it turns out, buy now, pay later service is not too good to be true. While BNPL allows you to have a longer lead time on paying for items you want, you need to be careful of the risk of going into debt for nonessential purchases. 

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