3 PAYMENT METHOD SCORECARD: BUY NOW PAY LATER
3.5 Buy Now, Pay Later Security Metrics
Liability Rules (i.e., Network Rules) BNPL usually are held liable in the case of fraudulent activity. 855 Refund Mechanisms While many BNPL providers provide clear guidelines for their refund process, it is quite cumbersome in comparison to the ease of card chargebacks. 856, 857, 858 Brand Risk Merchants could consider offering BNPL as a payment method a brand risk. BNPL makes it easy for consumers to spend more than they currently have, and while it can be helpful in some circumstances, brands offering BNPL could be seen as predatory if not balanced appropriately by other payment methods. Fraud Risk (Merchant) While BNPL accounts and transactions are susceptible to fraud, the BNPL provider is usually held liable instead of the merchant. Fraud Risk (Consumer) Most BNPL providers have dispute frameworks in place, however, the lack of industry standards provides no regulated guarantee for consumers.
Weight Score
Approvals Considerations Error Resolution Framework System Liability Rules (i.e. Network Rules)
15% 3.5
15% 3.5
20% 3.0
Refund Mechanisms
10% 2.0 10% 2.0 15% 4.0 15% 2.0
Brand Risk
Fraud Risk (Merchant) Fraud Risk (Consumer)
TOTAL SCORE
3.0
Approvals Consideration BNPL has less security measures in place and is more likely to give small loans to the user. 853 False declines are not as common as card payments but still can occur. Error Resolution Framework Error resolution can vary depending on region and BNPL provider. Some countries have seen regulations pass to treat BNPL similar to credit cards. BNPL providers, like Klarna, also have their own framework to resolve errors including returns, goods not received, and unauthorized purchases. 854
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