Start with the substance of the agreement
Buy now, pay later is considered consumer credit when the arrangement meets the relevant jurisdiction's definition of credit and does not fall within an applicable exclusion. The checkout description, short repayment term or promise of no interest does not settle this question. In a typical third-party BNPL structure, a finance company pays or funds the merchant while the consumer agrees to repay over time. Recital 16 of Directive (EU) 2023/2225 expressly identifies such schemes as intended to be covered. For an EU assessment, examine the contract, supplier relationship, finance flow and applicable national implementing law. A merchant's marketing label is evidence of how the product is presented, not a legal determination.
Identify who grants or acquires the credit
The central distinction in the CCD2 deferred-payment exclusion is whether the supplier itself postpones collection or a third party offers credit. Article 2(2)(h) does not cover a supplier arrangement when a third party offers the purchase credit. For certain larger online suppliers, it additionally requires that a third party neither offers nor purchases the credit. This makes the treatment of assigned receivables especially important for that category. Firms should examine contractual responsibilities rather than assuming that all payment service providers are creditors or that any technology integration creates a credit agreement. A platform may process payments, act as an intermediary, purchase receivables or act as creditor, and these functions require separate evaluation.
Apply the supplier deferred-payment conditions
Under Article 2(2)(h), an excluded supplier deferred-payment arrangement must satisfy multiple conditions together. The supplier provides the time to pay without a third-party credit offer. The price is payable without interest or other charges, except limited late-payment charges imposed in accordance with national law. Payment must be fully completed within 50 days of delivery of the goods or provision of services. For a qualifying supplier that is not an SME and provides information society services consisting of online distance contracting, the narrower 14-day limit applies, and the third-party restriction also covers purchase of the credit. Neither a 50-day nor a 14-day period can be assessed in isolation. Delivery dates, contract timing and actual settlement obligations matter.
A short example shows why roles matter
Suppose a shop invoices a consumer for a delivered item and accepts payment 30 days later, without interest or charges other than permitted limited late-payment charges. Assuming there is no third party offering credit and no narrower online-supplier exception, the arrangement may satisfy the CCD2 deferred-payment exclusion. Change the structure so an independent finance provider offers instalments at checkout and the legal analysis changes even if the displayed price stays identical. Change the shop to a qualifying large online supplier and the 30-day arrangement may no longer satisfy the exclusion because the applicable period is 14 days. These examples illustrate factors to test rather than conclusions about any real product.
Do not conflate EU dates with existing national law
CCD2 is a Directive, not a universal direct replacement of every Member State consumer credit rule on the date of adoption. It entered into force in 2023 and the national implementing measures are to apply from 20 November 2026. Until then, existing national consumer credit law and any applicable transitional or sectoral rules require separate attention. The previous EU Directive, 2008/48/EC, is repealed with effect from 20 November 2026, subject to transition for existing agreements. Member States also have choices under CCD2 for some categories of credit. A scope memo should identify whether it addresses current permissions and obligations or preparations for the later framework.
Document a reproducible classification
A defensible classification record should contain product terms, the provider and supplier contracts, payment flows, consumer eligibility, the repayment calendar, fee schedule, dates of delivery, the status of each contracting party and any assignment arrangement. Record which subparagraph of Article 2 is relevant and why each condition is or is not met. Specify the Member State, the current national statute and the intended CCD2 implementation. Keep an approval record and review triggers for material design changes. A reusable decision tree is useful operationally, but it cannot remove the need to inspect the actual legal structure and current national legislation.
Additional classification and operational considerations
The classification should also account for the customer journey at the point of purchase. A finance provider may be introduced through an embedded widget, a merchant-branded checkout or a separate application. An apparently identical payment schedule can have different legal consequences when funding or assignment arrangements change. Firms should record whether consumers assent to separate credit terms, who can demand payment, who decides whether to approve credit and who administers arrears. For cross-border operations, a legal assessment for one Member State should not simply be copied into another. The factual evidence should be preserved in a form that lets reviewers reproduce the conclusion after products, partnerships or implementing legislation change.
Frequently asked questions
Is every pay-later invoice consumer credit?
No. Article 2(2)(h) provides a narrowly conditioned exclusion for certain supplier deferred payments.
Can a third party offer credit under the supplier exclusion?
No. The relevant exclusion requires the supplier to defer payment without a third party offering credit.
What is the time limit?
The general Article 2(2)(h) limit is 50 days after delivery or service provision; certain non-SME online distance suppliers face a 14-day limit with additional conditions.
Primary sources
Directive (EU) 2023/2225, official text ↗EUR-Lex transposition measures ↗Read the source in its current version. National implementing measures and product-specific applicability may require additional research.