Buy now, pay later services have to act more like credit card providers now
Buy now, pay later services — or BNPL for short — are now beholden to some of the same rules as credit card providers. On Thursday, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule that classifies BNPL services as credit card providers and requires them to investigate disputed purchases, among other things.
BNPL services let customers purchase a product and then pay for it in a series of interest-free installments. Under the new guidance, BNPL services like Klarna, Afterpay, and Affirm must provide refunds for returned products or canceled services and send periodic billing statements to customers. The CFPB’s decision comes after launching an inquiry into BNPL services, which found that BNPL “is often used as...