Date: 01.09.2022Buy now, pay later
These credit-based payment methods enable customers to pay the invoices for consumer goods later and/or in instalments. Legally, this includes loans, instalment purchases, deferral agreements and any type of financing assistance. These are usually offered to consumers via specialised payment service providers. As the threshold for consumers to use such payment types is low, which can lead to debt accumulating rapidly, BaFin has issued consumer information to warn consumers of the risks. Depending on the business model, offering such credit-based payment methods often triggers an authorisation requirement under the German Banking Act (Kreditwesengesetz – KWG) or the ZAG. Further information on the ZAG can be found in our Guidance Notice about the ZAG.
