First and foremost, the BNPL industry has experienced rapid growth, driven by consumer demand for flexible and transparent payment solutions. This trend has been further reinforced by merchants’ desire to enhance conversion rates, for which they found BNPL to be a suitable solution. Along with the industry’s progress, we must continue to expand its accessibility, particularly within ecommerce and digital-first retail environments. However, with this growth comes a greater responsibility to ensure sustainable and responsible lending alongside risk and fraud protection measures.
Everybody in this sector prioritises consumer protection through clear communication regarding repayment obligations, robust risk assessment models, and data-driven credit decisioning. Currently, standardised, industry-wide affordability checks are being discussed quite a lot. At both local and European levels, regulatory developments aim to establish common standards in order to strengthen responsible lending practices. Ultimately, this is a base practice if you try something first and then pay for it later (the concept of BNPL).
Regulatory frameworks vary quite significantly across regions. In some markets, there are stricter consumer protection measures, and in the Netherlands, for instance, regulators are fairly advanced in ensuring that BNPL providers adhere to responsible lending practices, even though they don’t necessarily offer traditional credits. In comparison, other countries, such as Switzerland, take a more lenient approach.
Overall, the introduction of the Consumer Credit Directive (CCD2) will harmonise the requirements for BNPL businesses quite a bit – and with it come many benefits. I sincerely believe this will enable the industry to take another step forward in ensuring that transactions meet proper creditworthiness standards and disclosure requirements.
Fighting against fraud means staying one step ahead of threats, a challenge that is not unique to BNPL but common across all payment methods.
We mostly see three types of fraud:
Synthetic identity – where fraudsters create fake identities using a combination of real and fabricated personal information.
Account takeover – which, similar to synthetic identity fraud, has been significantly streamlined with the emergence of AI, enabling fraudsters to scan and skim through large amounts of data quickly. AI can help enrich missing information, and hence, account takeover becomes easier. This way, criminals can gain unauthorised access to consumer accounts and make fraudulent purchases. So, databases in, for example, the dark net are much more easily exploitable now with the help of AI tools.
Chargeback (friendly fraud) – where consumers dispute legitimate transactions after receiving goods and services, moving the cost to the merchants.
Everybody obviously invests into advanced risk-scoring models, AI in risk-scoring, and seamless authentication solutions – such as bank IDs and iDIN to reduce account takeover and identity fraud –, and everything, of course, is heading towards real time.
However, I think the most significant aspect of fraud prevention is a collaborative approach to fraud intelligence. This means that it’s not just the payment service provider’s responsibility to engage in fraud prevention but, at the same time, that of the delivery providers, warehouse management teams, authorities, and other providers. Effective fraud mitigation requires an interplay between the merchant and all the players within this scenario.
For example, fraud patterns emerge, of course, only over multiple transactions. So, if fraud patterns start occurring, it means that some of these fraudsters have already succeeded with their first couple of orders before their activity pattern is detected. Hence, in the BNPL world, real-time connections to delivery providers enable us to stop those orders and ultimately protect consumers, the merchant’s reputation, and us as providers.
In the past, integrating fraud prevention measures across multiple parties was a major hassle. However, the industry, with all its technical advancements, has now reached a point where collaboration between stakeholders is both necessary and achievable. The ultimate goal is to enhance fraud intelligence sharing and ensure that our systems communicate with one another – which is key to staying at the forefront of fraud prevention and ensuring a better experience for consumers, merchants, and providers alike.
This editorial piece was originally published in The Paypers` Buy Now, Pay Later Report 2025. The report provides thorough insights into one of the fastest-growing alternative payment methods, BNPL, and discusses the main trends and innovations across key markets worldwide.
Alex Scheibel is the Product Lead for Payments at Riverty, building products for 40 million consumers, over 20,000 merchants, and Riverty’s growing partner ecosystem in the 9 European markets in which it currently operates. Alex has been at Riverty, a Bertelsmann company with almost 5,000 employees, for 10 years, in different product roles across Germany, Sweden, and the Netherlands, which allowed him to shape the BNPL market across Europe.
Riverty is a leading fintech company with a presence in 13 countries. Specialised in transparent payment methods tailored for consumers, Riverty offers merchants a comprehensive toolkit, from BNPL schemes to smart accounting and debt collection, enhancing the financial journey for all stakeholders.
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