Buy Now Pay Later (BNPL) is a new way of purchasing items online or in store without having to pay the full price upfront. It is gaining popularity among consumers and retailers alike due to its convenient payment plans.
Perpay is one of the most popular BNPL services around. The company offers customers a variety of flexible payment options for over 1,000 online stores—no credit check required. And the best part? By making payments on time, the company claims the average user increases their credit score by 39 points.
But does the company live up to these lofty claims? In this in-depth review of Perpay, we’re going to find out!
What Is Perpay?
Perpay is a BNPL service that was founded by current CEO Chris DiMarco in 2017 with the goal of making it easier to purchase items online.
The company is different than others in the BNPL space, though. Rather than making its money by charging interest or late fees, Perpay is actually an ecommerce marketplace like Amazon. It buys products at wholesale rates and resells them at a markup on its marketplace using the BNPL model.
Currently, Perpay has over 4 million users in the United States. Those members have increased their credit scores by a combined 575,000 points since joining Perpay—not too bad!
What is BNPL?
BNPL stands for “Buy Now, Pay Later.” It is a financial service that allows consumers to make a purchase and defer the payment for that purchase over a set period, typically in installments. This payment option has become popular in recent years, particularly for online shopping, and is offered by various companies, often in partnership with retailers.
Here’s how BNPL works:
Purchase: A consumer selects a product or service they wish to buy from a retailer that offers BNPL as a payment option.
Installments: Instead of paying the full price upfront, the consumer has the option to split the total cost into smaller, equal payments (installments). These payments are spread over a fixed period, often weekly or monthly.
Interest or Fees: Some BNPL services offer interest-free installment plans if the consumer makes all payments on time. However, others may charge fees or interest, particularly if the payments are not made as agreed.
Approval Process: The consumer’s eligibility for BNPL may depend on factors such as creditworthiness, purchase amount, and the terms offered by the specific BNPL provider.
BNPL services are typically available for a wide range of products, including clothing, electronics, home goods, and more. They are often used by consumers who prefer the flexibility of spreading out payments, especially for larger purchases, without the immediate financial burden of paying the full amount upfront.
It’s important to note that while BNPL can be convenient, consumers should carefully read and understand the terms and conditions of the BNPL service, including any potential fees or interest rates. Missing payments or not understanding the terms could lead to additional costs.
Who Can Use Perpay?
Perpay has a specific set of requirements you’ll need to meet in order to sign up for the service. It isn’t too restrictive, but there are a few sizable groups that will find themselves ineligible.
The requirements are:
- Be actively employed in a full-time position
- Have three months of continuous employment history with your current employer
- Get paid via direct debit
- Have an active mobile phone
- Have no active bankruptcies
- Be in good standing with all financial obligations
Unfortunately, this list excludes all independent contractors, self-employed workers, and gig workers.
How Does Signing Up for Perpay Work?
Signing up for Perpay takes about 60 seconds in total—the forms are straightforward and there is no hard or soft credit check.
You’ll be asked to provide some basic information like your name, email address, and phone number. After that, you’ll need to give Perpay a bit of information about your employer and income.
Perpay will then use the income information you provide to issue you a spending limit—this is your spending power. Every purchase you make will need to be within this spending limit, but you can have it reevaluated later if you’d like.
How Does Making Purchases on Perpay Work?
Making a purchase through Perpay is fairly easy. It’s definitely more complicated than other BNPL services like Afterpay or Sezzle, though.
The process looks like this:
- Shop around the Perpay marketplace
- Submit your order to the Perpay Approvals Team for review
- Set up your payroll direct deposit (if approved)
- Choose how many payments you want to make
- Order ships when first payment is made
- Payments are processed automatically on each payday
While some BNPL services are integrated directly into the online checkouts of major retailers, Perpay is not. You’ll need to do your shopping on the Perpay marketplace. That’s not a big deal, though—just a minor inconvenience. You can still shop with over 1,000 brands ranging from Samsung to Marc Jacobs.
What is a big deal (at least for the impatient) is the fact that your order doesn’t ship until Perpay has received the first direct debit payment on your upcoming payday. Depending on how often you get paid, that could be a couple weeks away or longer. After your first order goes through though, any subsequent orders made will be shipped immediately.
What Fees Are Associated with Perpay?
Perpay doesn’t charge any fees or interest for its service. You’re only paying for the cost of the item, plus tax and shipping (if applicable). This is great—especially when you look at the fees charged by competitors. For example, Afterpay charges $8 per late payment.
Not charging fees goes a long way towards making Perpay accessible for the kind of consumer Perpay is targeting. That said, you still shouldn’t be missing your payments. Perpay automatically reports all late payments to the three credit bureaus—Experian, Equifax, and TransUnion.
Can Perpay Help You Build Credit?
Perpay can help you lose credit out-of-the-box—it automatically reports all late payments to the three credit bureaus. If you want to build credit using Perpay, you’ll need to pay for Perpay+ ($2/month) in order to have your on-time payments reported.
Perpay+ is an optional upgrade that gives you access to more rewards, better customer service, and the ability to have your on-time payments reported. It’s an optional upgrade, though—the regular Perpay service is still free to use.
It’s worth mentioning that Perpay doesn’t consider you financially liable to continue making payments if you lose your job or suffer from some kind of financial emergency. They’ll work with you to come up with a solution that doesn’t harm your credit score.
If you need help fixing your credit, check out our ultimate guide to DIY credit repair.
What are the Pros and Cons of Using Perpay?
- No Fees: Perpay doesn’t charge any fees or interest—you’re only paying for the cost of the item, plus taxes and shipping (if applicable).
- Sizable Marketplace: You can shop with over 1,000 brands ranging from Samsung to Marc Jacobs.
- Build Credit: With the optional Perpay+ upgrade, you can have your on-time payments reported to the three major credit bureaus.
- Lengthy Repayment Terms: You can choose how many pay periods to spread your payments over—up to 6 months.
- Little Flexibility: It’s difficult to get your spending limit raised or lowered (although it is possible).
- No Instant Shipping: Your order won’t ship until Perpay receives the first direct debit payment.
- No External Shopping: You can’t use Perpay at external checkouts or in-store.
Is Perpay Worth Signing Up For?
In my opinion—yes.
Consider a hypothetical scenario for a moment. You’re a full-time worker with poor credit who lives paycheck to paycheck. One day, your refrigerator breaks—a replacement is $500. You can’t afford to pay for it upfront, but you don’t have the credit score to pay for it on credit. What can you do?
Tons of Americans find themselves in situations like this on a regular basis—and Perpay is a fantastic solution to the problem. Perpay makes high-ticket purchases affordable for the average person without relying on late payment fees or high interest rates to stay profitable.
It isn’t a perfect service, but considering the zero-risk signup process, it’s definitely worth checking out. And even if you can afford the occasional high-ticket purchase upfront, Perpay is still a great to build credit while managing your cash flow.
Afterpay – Afterpay is a popular BNPL provider that allows users to split purchases into four interest-free payments over six weeks.
Klarna – Klarna is another popular BNPL provider that offers flexible payment options, including interest-free financing, installment plans, and more.
Affirm – Affirm is a BNPL provider that offers installment loans with fixed interest rates and repayment terms ranging from three to 36 months.
Sezzle – Sezzle is a BNPL provider that allows users to split purchases into four interest-free payments over six weeks, with no credit check required.
Quadpay – Quadpay is a BNPL provider that allows users to split purchases into four interest-free payments over six weeks, with no credit check required.
Splitit – Splitit is a BNPL provider that allows users to split purchases into interest-free payments using their existing credit cards, with no credit check required.