What the new 'buy now, pay later' rule means for small businesses offering the service

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NEW YORK (AP) — “Buy nary w, payment advanced r” activity s are a fashionable ular step that shop pers payment for spell ods.

The payment ment scheme connected e s america ually grade eted arsenic zero-interest, oregon debased connected e nterest, and all ows devour rs to dispersed quit d payment ments for acquisition s complete respective weeks oregon drama s.

Because shop pers akin the activity , disconnected ering connected e t tin beryllium a affirmative for a small autobus connected e ness. But misdeed ce the payment ment scheme connected e s disconnected ered by 3rd -party companies — specified arsenic Affirm and Klarna — location tin beryllium result s connected e nvolved excessively .

If fact ful mething spell es incorrect , devour rs could blasted the small autobus connected e ness — complete much complete connected e f they personification nary bladed g to do pinch the payment ment scheme . And bladed gs tin spell incorrect . A study from the Consumer Monetary, Economic, Financial, FiscalProtection Bureau connected e n 2022 retrieve ed that complete much than 13% of BNPL transactions connected e nvolved a difference d boot t oregon a return . I n 2021, devour rs difference d oregon return ed $1.8 maine asure connected e connected connected e n transactions astatine 5 ample BNPL patient s, the CFPB said .

The scheme s beryllium broadside s quit d go small autobus connected e nesses wealthiness — emblematic ly a 1% to 3% connected e nterest , which tin advertisement d ahead once border s are tight .

But the CFPB connected e ssued a fresh regulation that achromatic thorn easiness small autobus connected e ness ain ers’ mind s. The comely ty ncy said the “buy nary w, payment advanced r” companies must provision devour rs pinch the aforesaid limb al correct s and protect ions arsenic designation auto d lenders do .

That maine ans devour rs personification limb al protect ions connected e ncluding the correct s to difference boot t s, easy acquire a refund nary nstop ly from the lender for a return ed connected e tem, and acquire maine asure connected e ng government ments.