Question
(#262)
Country : New Zealand
In a Buy Now, Pay Later plan, late fees are charged if a payment is late. Are these fees essentially interest? If so, will using these services be impermissible only when there’s a concern about paying on time, or will it be impermissible from the beginning?
Answer
بسم الله الرحمن الرحيم
السلام عليكم و رحمة الله و بركاته
حامدا و مصليا و مسلما
Muhtaramah
We have received your query regarding Buy now and pay later schemes, our response is as follows:
Please refer to the following answer of Darul Ifta Azaadville:
PayFlex is mentioned below as an example among many different BNPL (Buy Now, Pay Later) service providers.
For the Customer:
These services vary significantly from one company to another. Some charge customers a monthly fee, which may depend on their account balance or activity. Others charge the customer a percentage of the sale amount for longer-term payment plans, irrespective of whether payments are made on time or not. In these cases, it will not be permissible to use such services, as they constitute Riba (interest).
If the BNPL provider’s terms are essentially the same as those of credit card companies, then the same rulings would apply— meaning that it would be permissible in cases of need when there is an interest free settlement option, provided the person in question is confident they will not miss any payments. It then follows that if there is no need to utilise such services, it will not be permissible to do so, just as the ruling is for a credit card.
For the Merchant:
If you, as the merchant, are charged a processing fee or a commission per transaction in order to offer these BNPL services; that would not, in itself, make it impermissible for a merchant to provide these services.
If a BNPL service operates in any other way, the ruling might differ.
And Allah Ta’ala knows best
Answered by:
Muhammad Irshad Motara
28th Jumadul Ula 1447
20th November 2025