Buy Now Pay Later(BNPL) is a strange concept- you buy the item today, and you pay for it later(usually after 30 days).
This is like a short-term loan. But the BNPL company doesn't charge any interest from you😮
Then how do they make money?🧐
To understand this, first, we have to understand that people like using BNPL🎁
It has been observed that when people have the option for BNPL, they buy more stuff.
That's why shops- both online and offline, are eager to add BNPL as a payment option for customers.
So BNPL companies(like Klarna and Affirm) fulfill this need, and take a commission from the shops.
That's how BNPL companies make money🙂