BNPL in Germany: Buy Now, Pay Later

BNPL comes in two forms. With pay later, the shopper pays the full amount after a set period, often 14 or 30 days, without interest. With installments, the purchase is split into monthly payments, usually with interest. In both cases a BNPL provider usually pays the merchant and takes the risk that the shopper does not pay.

Germany had the model long before the English name: paying by invoice, Kauf auf Rechnung. In 2025 it accounted for 26.1 percent of German online retail turnover, second after PayPal with 28.7 percent, and installment purchases for 4.7 percent, according to the EHI Retail Institute's study Online-Payment 2026 as reported by IT Finanzmagazin (in German). Of the 1,000 largest German online shops, 81.7 percent offer payment by invoice and 45.9 percent offer installments or financing, the EHI E-Commerce-Report 2026 (in German) found. Many shops hand the invoice option to a BNPL provider such as Klarna or Ratepay, which pays the shop and collects from the shopper.

PayPal offers German customers payment after 30 days for purchases from 1 to 3,000 euros, and installments over 3, 6, 12 or 24 months for 99 to 10,000 euros, according to its BNPL page (in German). The lender behind both is PayPal (Europe) S.à r.l. et Cie, S.C.A. in Luxembourg. Klarna offers pay later and installments at the checkout of many German shops. Ratepay, which describes its product as "customizable BNPL for e-commerce", runs invoice, direct debit and three-installment payments under the shop's own brand.

Between companies the same model is called B2B BNPL. A business buyer orders from a supplier and pays on account later, while the provider pays the supplier at once. Billie, based in Berlin, calls itself "the new standard for B2B payments" and offers business buyers pay later, payment in installments and pay on account. Consumer credit law does not cover these deals, since both sides are businesses.

The EU rewrote its consumer credit rules in Directive (EU) 2023/2225, the second Consumer Credit Directive (CCD2). The first directive of 2008 left out interest-free credit, credit below 200 euros and credit repaid within three months, and most BNPL offers passed through those gaps. The German transposition law, passed by the Bundestag on April 17, 2026, brings small loans up to 200 euros, interest-free and fee-free credit, credit of up to three months and buy now, pay later models under consumer credit law, according to the federal government (in German). Its consumer credit rules apply from November 20, 2026.

For a BNPL provider that means a creditworthiness check before the credit and pre-contract information for the shopper. When the check runs on automated data processing, the shopper has the right to a human review. The law firm LSP Lindemann Schwennicke & Partner lists the exemptions: credit that a seller grants itself, without a third party, and that is repaid within 50 days of delivery stays outside, while large online retailers get 14 days. Debit cards that defer the debit by up to 40 days without interest are also exempt. A new supervisory law for sales financing, the Absatzfinanzierungsaufsichtsgesetz (AbsFinAG), makes lenders that finance consumer purchases through merchants register with BaFin.

A shop that offers pay later through a partner keeps its checkout, but the partner now has to check the shopper's creditworthiness and show the pre-contract information at the right moment. A shop that finances its own customers beyond the exempt periods becomes a lender under the new rules. The lending in Germany page covers the wider consumer credit and scoring rules, and the embedded finance in Germany page covers the license behind a credit offered in someone else's checkout.

Finance Loop is the meeting place for people who build and supervise payments and consumer credit in Germany: product and risk teams at banks and payment providers, e-commerce payment specialists and the lawyers who work through the new credit rules. It connects the finance, IT and AI communities in Germany, Austria and Switzerland, with events in Frankfurt, Munich, Berlin and Hamburg.

At the FinTech Founder & Investor Evening in Frankfurt, with Finance Loop as partner, the founder and CEO of Teylor, an online lending platform for small and mid-sized businesses, talks about capital and regulation. In Berlin, home of Billie, Finance Loop brings together people from payments in Berlin and the city's fintechs.

Capital & Code is a one-day conference in Frankfurt on stablecoins, tokenized funds and payments, hosted by AllUnity. Its audience includes merchants and payment providers, with embedded finance and checkout on the program, and its panel on the future of payments has PayPal, Mastercard, AllUnity and Worldline on stage. Finance Loop is a media partner of the conference.

BNPL, short for buy now, pay later, is short-term credit at the checkout. The shopper receives the goods and pays after a set period or in installments, and a BNPL provider pays the merchant and collects from the shopper. In Germany the common forms are payment by invoice and installment purchase.

Yes. The German law that carries the second Consumer Credit Directive applies from November 20, 2026. It brings interest-free credit, credit below 200 euros and credit repaid within three months under consumer credit law, with a creditworthiness check and pre-contract information. A seller's own payment terms of up to 50 days, or 14 days for large online retailers, stay exempt.

A credit card is a credit line from a bank that works at every merchant that accepts the card network, usually with one monthly bill. BNPL is credit for one purchase, offered at the checkout of a merchant that works with the BNPL provider. A credit card always needed a creditworthiness check; under the new consumer credit rules most BNPL offers need one too.

B2B BNPL is buy now, pay later between companies. A business buyer orders from a supplier and pays on account after an agreed period, while the provider pays the supplier at once and takes the credit risk. Consumer credit law does not apply, because the buyer is a business.