A buy-now-pay-later product tells the borrower a simple thing: pay a quarter of it today and the rest in three equal parts, at 0.00 %. That number is true. It is also the single most misread field in the whole definition, because a product with no borrower interest is not a product with no cost.
Somebody funds the money
Credit at zero to the borrower is credit paid for by the merchant. The merchant fee is the price of the sale it unlocks, and it is the revenue line the entire product rests on. Set it at 3.50% and the product is a business. Set it at 1.00% and you are lending your balance sheet for free.
Which means the merchant fee is not a commercial setting that lives in a contract somewhere. It belongs in the product definition, versioned and signed like the rate on any other loan, because it is the rate on this one.
The ticket range is the risk control
An installment product manages risk with a rate. A BNPL product has no rate to manage it with, so risk is expressed almost entirely as a range: a ticket minimum, a ticket maximum, a number of splits, and a cadence. Those four fields are the product.
- A ticket minimum below which the fixed cost of servicing four collections exceeds the merchant fee on the sale.
- A ticket maximum above which an unsecured, uninterested, four-payment loan stops being a sensible thing to write.
- Splits and cadence (four payments, bi-weekly) that decide how long the exposure lives.
Move the maximum from MXN 15,000 to MXN 30,000 and nothing in the product looks different. Every field still reads the same. The book underneath it is now a different book.
The late policy is a product decision
The moment a borrower misses a payment, a zero-interest product has to answer a question it has been avoiding: what happens now? Pause the plan and charge nothing. Charge a flat late fee. Start accruing. Each answer produces a different product, a different disclosure, and a different regulatory conversation, and none of them can be left to whoever writes the collections runbook.
It is also the answer most likely to quietly turn a 0.00% product into one with a real annual cost. A late fee is a charge, a charge enters the official cost, and the official cost is what the product is judged by. Defining the late policy is defining the price.