Buy now, pay later (BNPL) is an emerging service that makes it easier for consumers to afford their purchases. As an investor, you might want to sit up and take note. In a nutshell, here’s how BNPL works. BNPL companies partner up with merchants, allowing customers to make their payments in a series of interest-free installments. The BNPL service provider will settle the full cost of the purchase to the merchant right away, taking a small cut of the purchase price in return.