Last summer, my laptop crashed spectacularly right before a critical work deadline. With limited savings and a paycheck still a week away, I turned to a Buy Now, Pay Later service for the first time. The experience was interesting, not just in how I could afford an essential purchase during a cash crunch but in how the entire process seemed perfectly tailored to my financial situation.

What I didn’t realize then was that artificial intelligence was working behind the scenes, determining my eligibility, customizing my repayment schedule, and establishing safety rails to ensure I wouldn’t overextend myself. This invisible technology is transforming BNPL from a simple financing option into a personalized financial tool that benefits both consumers and providers.

The BNPL Numbers

The Buy Now, Pay Later industry has experienced exponential growth, with global transaction value exceeding $680 billion in 2024 and projected to reach $1.2 trillion by 2028, according to a recent Juniper Research report. A separate study by McKinsey found that BNPL usage grew by 85% in the past year alone, with over 45% of consumers having used these services at least once.

Buy Now, Pay Later (BNPL) has emerged as a transformative force in Nigeria’s financial sector, offering consumers flexible payment options and driving significant market growth.IBS Intelligence

Why BNPL is a Game-Changer in Nigeria:

• Rapid Market Expansion: Nigeria’s BNPL market is projected to grow by 13.8% annually, reaching $1.62 billion in 2025.
• Long-Term Growth Forecast: The BNPL sector is expected to achieve a compound annual growth rate (CAGR) of 11.2%, from $2.80 billion in 2023 to $5.59 billion by 2029.
• E-commerce Synergy: The surge in BNPL adoption is closely linked to Nigeria’s booming e-commerce sector, providing consumers with more accessible financing options.

These figures underscore BNPL’s pivotal role in enhancing financial inclusion and offering alternative credit solutions in Nigeria. This surge brings both opportunity and challenge to how providers can offer instant credit decisions while managing risk and ensuring responsible lending.

The answer increasingly lies in artificial intelligence.

Reimagining Credit Assessment

Traditional credit scoring models rely heavily on credit history, creating accessibility barriers for younger consumers, new immigrants, and the credit-invisible. BNPL providers are now using alternative approaches using AI that consider thousands of data points within a short time beyond conventional credit reports.

These AI-powered systems analyze factors including:

• Transaction history patterns
• Banking data (with consumer permission)
• Payment reliability with other merchants
• Device and behavioral signals that correlate with repayment likelihood

The result? More inclusive access to flexible payment options while maintaining sustainable default rates.

My BNPL laptop purchase came with a repayment schedule that aligned perfectly with my payday calendar — not by coincidence but by design, AI.

Today’s advanced BNPL platforms leverage AI to customize every aspect of the user experience:

Dynamic Payment Terms

Rather than rigid standardized offerings, AI enables truly personalized payment structures based on:

• Purchase amount and category
• Consumer financial patterns
• Historical repayment behavior
• Current financial obligations

This flexibility increases conversion rates for merchants while improving affordability for consumers.

Intelligent Spending Limits

Static credit limits are giving way to dynamic limits that adjust based on real-time financial circumstances. These AI-powered systems will temporarily increase available credit when a consumer receives their paycheck or reduce limits during periods of financial stress — helping prevent overextension.

Predictive Risk Management

Perhaps the most transformative AI application in BNPL is predictive risk assessment — identifying potential repayment issues before they occur.

Advanced models can detect subtle signals of financial stress, enabling proactive engagement before payments are missed. These might include:

• Changes in spending patterns
• Unusual account activity
• Early warning signs from aggregated anonymous data

Such interventions might include payment date adjustments, temporary hardship programs, or financial management resources — maintaining the customer relationship while reducing default rates.

Fraud Prevention Without Friction

BNPL services face fraud attempts given their instant decisioning requirements. AI-powered systems can detect anomalous patterns invisible to humans or rules-based systems, distinguishing legitimate transactions from fraudulent ones without adding consumer friction.

My laptop purchase story had a happy ending, the device arrived quickly, my payments aligned with my income, and the entire process felt smooth. What impressed me most wasn’t just the convenience but how the service seemed to understand my specific needs and circumstances.

This level of personalization, powered by AI, represents the future of BNPL. Providers who successfully implement these technologies stand to gain significant advantages: lower default rates, reduced fraud losses, increased merchant adoption, and most importantly, stronger customer relationships built on trust and relevance.

Visit usecentric.ai and see how Centric AI can help your business grow. Schedule a demo to see the possibilities of AI.

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