Buy now, pay later (BNPL) operates as a form of instalment loan, breaking down a purchase into several equal payments.

Companies and consumers say the introduction of the new ‘Buy Now, Pay Later’ system in Qatar is not just a plus for financial innovation but a new frontier for shoppers, and a potential catalyst for economic growth.

The scheme was announced by Qatar Central Bank on Saturday and applications for licenses will be reviewed starting from September.

“The BNPL system provides an opportunity for growth and aligns perfectly with the evolving needs of our market. It encourages spending while giving consumers the freedom to manage their finances in a way that suits them,” a Qatari business leader, who requested anonymity, told Doha News.

Announcing the move, Qatar Central Bank’s statement praised the system for not only allowing consumers to purchase without budget strain but also for fostering benefits such as easy budgeting and future payment planning.

“This payment method not only allows customers to indulge in their desired purchases without straining their budget, while providing multiple benefits like easy budgeting and planning future payments,” the statement said.

“Additionally, most BNPL services do not charge late or other fees if the instalments are paid on time, making it accessible to a wider range of customer segments,” it added.

The announcement aims to regularise the work of BNPL service providers in Qatar and aligns them with the nation’s financial sector strategy.

On the consumer front, Aisha Musleh spoke to the tangible impact this system could have on her life.

“It provides a chance for me and others to make essential or luxurious purchases without feeling financially strained immediately. For low-income people, it can be a lifesaver in certain situations, as long as we remain aware of our limits.”

Reflecting on her past struggles to save up for necessary purchases, she added, “I just make sure I budget the instalments accordingly.”

BNPL: A Growing Trend

The BNPL system is a type of deferred payment, allowing consumers to purchase goods and services immediately and pay for them at a later date, typically in instalments. The system has gained popularity worldwide, offering flexibility for consumers and potentially boosting sales for retailers.

In the UK, several firms have already adopted the BNPL model, resulting in increased scrutiny from financial authorities. Other countries, including the United States and Australia, have witnessed the rapid growth of the BNPL sector, making it an essential part of the modern financial landscape.

According to a QuadPay press release, merchants who used its BNPL service increased their average checkout value by 60%.