Although BNPL services are making buying goods easier without worrying about paying the full price, this service offering carries its share of risks.
By Michael Akuchie
For many Nigerian consumers, the usual payment methods include cash, bank transfer, or debit card. But what if a potential buyer cannot afford to pay the full price for a brand-new 5G-enabled device they have been eyeing since its announcement? Typically, the buyer would need to save up until they have enough to purchase the phone.
However, what if there were a way to get the phone without paying the full amount upfront? All they need to do is make an initial payment and then spread the balance over a period ranging from three months to one year. If the smartphone costs N900,000 and the buyer makes a downpayment of, say, N400,000, the remaining N500,000 can be spread over six months (around N83,000 per month) or a year (around N42,000 per month).
This payment method is called Buy Now, Pay Later (BNPL), and it has witnessed steady growth in many developing economies, including Nigeria. Reports by Research and Markets indicate that BNPL-financed payments in Nigeria will reach $2.40 billion by 2029.
Its popularity can be attributed to the fact that it allows users to purchase goods without worrying about paying the full amount upfront. The growing presence of BNPL services in Nigeria, such as CredPal, Carbon Zero, and PayQuart, is a welcome development, especially as citizens’ purchasing power continues to decline due to rising inflation.

With BNPL services, Nigerian consumers can now acquire a wide range of goods, from smartphones to cars. The most compelling value proposition of BNPL is that it helps bridge the affordability gap for Nigerians with limited access to credit from traditional lenders such as banks and cooperative groups.
Merchants also stand to gain from the adoption of BNPL services, as they can reach a wider consumer base thanks to the availability of a flexible payment option.
A typical BNPL-financed payment process involves filling out a physical or electronic form, either at the point of payment or beforehand. Consumers must provide basic personal details, such as their name, address, and contact number. Once completed, the approval process is usually swift, though some BNPL providers may take additional time to conduct background checks on the buyer’s credit score to assess their credit risk.
Following approval, consumers can purchase the intended item after agreeing to a repayment period. As mentioned, the time needed to pay the balance of the item and interest could take weeks or months. It is worth noting that some BNPL payments do not charge interest, especially if the customer pays back the loan within the stated period.
Although BNPL services are making buying goods easier without worrying about paying the full price, this service offering carries its share of risks. For consumers, the availability of instant credit can cause them to buy several needless things. This increases the amount they have to repay, thereby resulting in a sizable debt that they may not efficiently manage.
As mentioned, some BNPL services typically do not charge interest on purchases made through them, provided the customer completes the payments in installments promptly. When this does not happen, the BNPL service may be forced to add a late penalty charge which could increase the longer it takes the buyer to pay.
Another obstacle to the rise of BNPL services in Nigeria is financial literacy. Many Nigerians are unaware of BNPL services and how they work. With little to no knowledge about the benefits of BNPL services, it is difficult for such consumers to use the device to purchase goods.
There is also the issue of people buying items through a BNPL service and then reselling said item to an unsuspecting buyer without completing the payments in installments. Consider this case of a Nairaland user who bought a second-hand smartphone from a “UK used” store and was then contacted by Easy Buy, a popular BNPL service provider in Nigeria.
According to the Nairaland user, Easy Buy addresses them by a different name—presumably that of the phone’s previous owner—demanding repayment of the loan or threatening to restrict access to certain apps on the device.

The Nairaland user’s experience is a common one in Nigeria. Some individuals exploit the easy access to credit provided by BNPL services to purchase smartphones and other electronics. They then resell these goods without completing the payments, leaving unsuspecting buyers burdened with outstanding debt. In some cases, such devices may also carry late penalty charges in addition to the regular instalments.
The trend of second-hand phones being used to trap buyers in significant debt not only causes financial losses for victims but also undermines trust in the second-hand market. This, in turn, may lead to reduced patronage for legitimate vendors dealing in pre-owned devices, ultimately lowering their profit margins.
Although the concept of BNPL services is commendable because it allows people to buy things without paying in full, some individuals now exploit loopholes in the system to scam unsuspecting victims.
For BNPL services to appeal to a larger consumer base, certain safeguards are crucial. BNPL providers should educate consumers on the benefits of their services so that it clears any doubts about the process.
BNPL providers should also advocate for increased transparency in the resale market, alerting intending buyers of second-hand phones about the need to check if the device they want to buy was obtained through Easy Buy. BNPL service providers should also collaborate with vendors on preventing the resale of goods finances through a loan.

Through tamper-proof tagging or serialization of BNPL-financed devices, vendors and credit providers can easily track the phone if needed. Both parties can also combine resources to build an online tool that buyers can use to authenticate the ownership and financing status of second-hand electronics and other goods.
Not only will this discourage scammers but it will also reduce the rate at which stolen phones are peddled in the market.
The BNPL sector is one of the fastest-growing trends in Nigeria’s financial industry. Consumers are able to purchase goods without making full payment, and merchants are able to serve a wider consumer base, thus making it a win-win for all buyers and sellers.
However, educating consumers on how to use BNPL services and discouraging fraudulent practices will go a long way in ensuring that its service providers continue to be trusted as a viable alternative to traditional credit facilities.
Michael Akuchie is a tech journalist with four years of experience covering cybersecurity, AI, automotive trends, and startups. He reads human-angle stories in his spare time. He’s on X (fka Twitter) as @Michael_Akuchie & michael_akuchie on Instagram.
Cover photo credit: Forbes India