In recent years, the "Buy Now Pay Later” (BNPL – “Buy now, pay later”), a form of credit through which consumers buy goods or services by subsequently paying the price (delay), even fractionally (installment payments).
As the Bank of Italy points out, this form of credit is not the subject of a specification regulatory, even if it is at the center of the revision of the European Directive on consumer credit agreements. Therefore, the BNPL is a risk to consumers, as it could therefore encourage purchases that are not entirely aware and potentially unsustainable, thus exposing Italians to over-indebtedness.
How does Buy Now Pay Later work?
The classic BNPL scheme involves three parties:
- il consumer, who intends to purchase goods or services;
- il seller, which places such goods or services on the market;
- a third party, who, on the basis of an agreement with the seller, allows the consumer to defer payment, also in the form of installments.
This form of financing is usually of a limited amount and can be offered both online and in physical stores, in most cases it does not include interests o charges payable of the consumer, but commissions in case of delay o nonpayment. Credit is granted with a very quick procedure, without carrying out a creditworthiness assessment or on the basis of a simplified assessment.
In many cases, the deferred payment is granted directly to the consumer by a bank or a financial intermediary, who intervenes in the transaction by virtue of an agreement with the seller.
If the amount is equal to or greater than 200 euros
If the service provides a Commission a load of the consumer (except in the case of commissions of an insignificant amount in the case of contracts to be repaid within three months) and the credit amount is equal to or greater than 200 euros, the rules on consumer credit apply. These standards guarantee the consumer, among other things, the delivery of a pre-contractual document uniform at European level, the right of withdrawal from the credit agreement within 14 days, the right to early repayment , termination of the credit agreement in the event of non-fulfillment of the connected contract for the sale of goods or services (such as for example in the case of a loan granted for the acquisition of a professional service), with the consequent right to obtain reimbursement from the lender of the amount already paid. The Bank of Italy supervises compliance with consumer credit regulations.
What if it's under 200 euros?
If you pay in installments for a product that costs less than 200 euros, the protections provided by the regulations on consumer credit do not apply.
If the service of financing is lent by a bank or a financial intermediary, the protections of the general regulation on the banking transparency, which envisages - among other things - disclosure obligations of the operations and services offered and the related contractual conditions, pre-contractual information that complies with national rules, the written form of contracts and the right of customers to submit complaints, referFinancial Banking Arbitrator o address complaints to the Bank of Italy; Via Nazionale supervises compliance with these provisions as well.
What changes if the seller makes the extension?
Another model of BNPL consists of the combination between a payment extension granted directly by the seller to the consumer, without interest or other charges for the latter (except for any commissions in the event of late or non-payment), and a cessionimmediately following credit from the seller to a bank or financial intermediary. In this case, the deferred payment is usually agreed by the vendor with the involvement of the bank or financial intermediary in the concession decision; furthermore, the transfer of credit to the intermediary is typically prefigured already in the contract between the seller and the consumer.
When, as in this case, the deferred payment is granted by the seller and not by banks or financial intermediaries, the rules of protection for customers provided for by the Consolidated Banking Act do not apply, nor the controls by the Bank of Italy. The circumstance that the extension is granted by sellers of goods and services but the credit is assigned to a bank or a financial intermediary can constitute a additional risk factor for the consumer, represented by the greater difficulty of identifying the subject with whom he is concluding the deferred payment and of understanding exactly the role of the intermediary in the transaction. In this case, the consumer could be given the erroneous belief that the protective measures typical of the bank-customer relationship are applied.
