Buy Now Pay Later (BNPL)

We advised the leading payment institution on the following project:

CROSS-BORDER DEFERRED PAYMENT SERVICE – BUY NOW PAY LATER (BNPL)

• BNPL (buy now pay later) services, based on which consumers receive loans, usually with a short repayment period, to purchase a particular good or service, are becoming increasingly popular in trading practice. The loans are usually gratuitous, but not always. Depending on the service (paid vs. unpaid) offered by the entity providing the financing (deferment granted by the seller vs. loan granted by a third party) and other features of the services provided, different legal regimes apply.
• We also need to consider how transfers of funds to sellers of goods or services are contractually structured and how they are properly classified under the Payment Services Act. It may be necessary to obtain the appropriate authorization or registration as a payment service provider. Where a loan is granted by a payment institution, it is essential to determine whether it qualifies as a payment loan.
• Another issue is the question of the obligation to apply financial security measures in compliance with the Anti-Money Laundering and Countering the Financing of Terrorism Act. The question will arise in particular where the provision of a BNPL service requires the obliged institution to enter into a business relationship.
• We developed for our client, a leading payment institution, a comprehensive BNPL service offered cross-border.

The advisory services of DLK Legal included:

• preparation of a legal opinion on the appropriate legal classification of the planned model of provision of the BNPL service, taking into account its cross-border nature,
• development of model contracts (agreement and regulations), regulating the BNPL service offered to consumers, taking into account, in particular, the regulations governing the remote provision of financial services.