What is buy now pay later (BNPL)?

How it works at checkout

The customer chooses the BNPL option, is checked by the provider, and agrees to a repayment schedule. The provider pays the shop the order value less its fee, so the shop carries no repayment risk once the sale clears. The customer then repays the provider, often the first instalment immediately and the rest every two weeks. Moneysmart notes that BNPL services usually charge fees rather than interest, including late fees, monthly account fees and payment processing fees.

The Australian licence rule

ASIC explains that the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 extended the National Credit Code to buy now pay later contracts. From 10 June 2025, anyone engaging in credit activities involving these contracts must hold an Australian credit licence with the right authorisations and belong to the Australian Financial Complaints Authority. The obligation falls on the providers, not on the shops that offer them at checkout, but it means customers now get responsible lending checks and complaint rights.

When it helps a shop

BNPL tends to matter most where baskets are larger and the purchase is wanted now but budgeted over weeks: furniture, homewares, fashion, beauty and electronics. Providers pitch it to merchants as a way to complete more of those larger baskets. The trade off is the merchant fee, which is commonly higher than card processing, and the way returns work: refunds go back through the provider, who then adjusts the customer's remaining instalments.

Risks to be honest about

Moneysmart warns customers that BNPL makes overspending easier, that fees add up, that several services at once are hard to track, and that BNPL applications and missed payments can appear on credit reports and affect future loans. A shop that pushes BNPL hard, especially to younger customers, risks complaints and reputation. Present it as one option among others, show the full price, and never describe it as interest free without saying fees may apply.

Where it shows up in the product

OneCraft has no ready made store or checkout; the agent builds the shop from capability guides into the site's own database and sends the customer to Stripe Checkout to pay. Payments run through Stripe Checkout as a direct charge on the owner's connected Stripe account, with prices read from the site's database rather than the browser, on paid plans only; the platform fee is 2 percent on Starter, 1 percent on Pro and 0.5 percent on Pro+, with Stripe's own fees on top. Payments run through Stripe only, with no PayPal or cash on delivery flow, and refunds are made in the owner's Stripe dashboard. Stripe's own documentation lists the buy now pay later methods it supports and where.

Questions people ask