A new deferred payment option called “buy-now-pay-later” enables customers to enjoy the advantages of ownership and consumption of products before making the final payment in interest-free instalments. A sharp increase in the buy-now-pay-later sector was observed after the launch of After pay in Australia and now it is becoming a preferred mode of payment for e-commerce transactions all over the globe. Although Buy Now Pay Later (BNPL) services can be beneficial for customers, there are some challenges involved. The objective of the paper is to understand the mechanism (How it works), the risks and benefits of the BNPL services to their customers. This paper is based on secondary data and descriptive in nature.