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Create a BNPL Product - Tutorial

This tutorial walks you through the step-by-step process of configuring a Buy Now, Pay Later (BNPL) product using the XYB platform. BNPL is a popular financing model that lets customers split payments over time, typically interest-free, making it ideal for increasing conversion at checkout.

STEP 1: Create a New Product in Product Configuration

Navigate to Product Configuration > Products, then click Create New Product.

Fields:

  • Product Name: Internal and external display name.

  • Reference Code: Unique identifier, often auto-generated.

  • Product Group: Logical grouping such as BNPL, Retail Loan, Microcredit. Used for reporting and eligibility targeting.

  • Product Type:

    • CREDIT: For any lending product.

    • DEPOSIT: For saving or wallet accounts.

  • Status:

    • Draft: Editable.

    • Active: Available for contract creation.

    • Inactive: Not available for new usage.

STEP 2: Add a Credit Contract Service

Attach the Credit Contract v42 or latest available version.

General Configuration:

  • Group: Logical identifier used to tag product family (e.g., BNPL, POS-Finance).

  • Type:

    • FIXED_INSTALLMENTS_WITH_INTEREST: Predictable monthly payments with interest.

    • FIXED_INSTALLMENTS_WITHOUT_INTEREST: Zero-interest model.

    • BULLET: Principal paid at end.

    • BALLOON: Some principal paid monthly; large amount at end.

    • FLEXIBLE_INSTALLMENTS: Customer-defined repayment.

  • Merchant: The party receiving the funds.

  • Account Number: Merchant account to credit funds.

  • Currency: Single or multiple allowed (inherited from global config).

Why it matters:

Defines structure of financial flows: disbursement, repayment, and accounting.

STEP 3: Terms

  • Owner: Entity issuing the credit contract (e.g., a lender).

  • Owner Account Number: Where repayments are collected.

  • Length Type:

    • DAY, WEEK, MONTH, YEAR: Determines how contract duration is measured.

  • First Interest Payback Period: When interest begins to be repaid (e.g., period 1).

  • First Principal Payback Period: When principal repayment begins.

  • Settlement Type:

    • ORDER_BY_DATE_AND_TYPE: Prioritize earliest due items by component type.

    • ORDER_BY_PRIORITY: Custom-defined priority.

    • CUSTOM: Flexible ruleset (advanced use only).

STEP 4: Settlement Order

Defines the order in which components are paid:

  • Components:

    • PRINCIPAL

    • INTEREST

    • FEE

    • PENALTY

  • You can reorder based on financial strategy: risk-first (principal), revenue-first (interest).

STEP 5: Schedule Configuration

Schedule Types:

  • FIXED_PRINCIPAL

  • FIXED_INTEREST

  • FIXED_PRINCIPAL_AND_INTEREST

  • EQUAL_INSTALLMENTS

  • MANUAL

Used to calculate installments.

Frequencies:

  • DAILY, WEEKLY, BIWEEKLY, MONTHLY, QUARTERLY, YEARLY

Used for both Principal Payment Frequency and Interest Payment Frequency.

Agreement Length:

  • Define default, min, max, and step for duration.

  • Based on Length Type above.

Amount Configuration:

  • Default Amount: Suggested default.

  • Min / Max: Range of permitted loan size.

  • Step: Increment allowed (e.g., steps of 5).

STEP 6: Customer Eligibility

  • Customer Sector:

    • PRIVATE_CUSTOMER, BUSINESS, FREELANCER, etc.

  • Customer Segment:

    • Free-text based targeting (e.g., Premium, Startup)

Determines who can see and access the product.

STEP 7: Interest Configuration

Interest Type:

  • PRINCIPAL, DISBURSED, OVERDUE

Variable Type:

  • FIXED: Static interest rate.

  • INDEXED: Uses market index (e.g., ESTR).

  • TIERED: Changes by amount or duration.

Interest Rate Values:

  • Default, Min, Max (in decimal form, e.g., 0.15 = 15%)

Day Count Conventions:

  • E30_360, ACT_360, ACT_365: Defines how interest is calculated based on actual or fixed day models.

Booking Period:

  • DAILY, MONTHLY, QUARTERLY: Frequency of interest accrual entries.

Rounding Method:

  • UP, DOWN, NEAREST

Frequency:

  • How often interest is paid by the customer (typically MONTHLY)

Is Paid by Customer:

  • Toggle to include interest as part of customer’s schedule.

STEP 8: Fees

  • Calculation Method:

    • FIXED_AMOUNT, PERCENTAGE, TIERED

  • Type:

    • ON_CONTRACT_CREATED, ON_OVERDUE, RECURRING, etc.

  • Amount / Percentage: Value of fee.

  • Recipient: Can be lender, merchant, platform.

Fees increase monetization and cover operational costs.

STEP 9: Contract Template

Attach an existing Credit Agreement Template for digital signing, downloadable PDF or regulatory compliance

10: Save and Activate

Once all sections are complete:

  • Click Save

  • Review product status

  • Set to Active to use it in contracts

Outcome

You’ve now built a complete BNPL product, fully equipped with:

  • Logical fund flow

  • Repayment rules

  • Pricing strategy

  • Customer eligibility

  • Digital contract support

This product is now ready to be used when creating credit contracts.

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