AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A buy now pay later plan that charges a fixed fee instead of interest still costs you money for time, and on short tenors that fee can equal a high annual rate. Divide the fee by the average amount you owe and by the months it lasts: a ₦6,000 fee on ₦120,000 repaid over three months works out at about 2.5% a month, or roughly 30% a year (labelled example).
Pay-later checkouts are now common in Nigerian online stores and some physical shops. Many advertise 0% interest, then show a service, convenience or platform fee in the breakdown. Neither word is misleading on its own, but the fee is the cost of borrowing, and the shorter the plan, the higher that cost is per month. This guide shows how to convert any flat fee into a rate you can compare with a loan, a credit card or simply waiting. For how pay-later plans work generally, start with Buy now, pay later in Nigeria: how it works for shoppers.
Why a fee is still a price for time
Without the plan, you would pay ₦120,000 today. With it, you pay ₦126,000 later. The extra ₦6,000 buys you the use of the shop's or provider's money for a period. It does not matter whether the receipt calls it interest, a fee or a charge. What matters is how much you pay, on how much money, for how long.
The quick method: fee ÷ average balance ÷ months
Because instalments reduce what you owe, you do not owe the full price for the whole term. Use the average balance outstanding.
- List what you owe at the start of each month of the plan.
- Average those figures.
- Divide the fee by that average, then by the number of months. That gives a monthly rate.
- Multiply by 12 for a simple yearly rate.
Worked example: three monthly instalments
Labelled example. A ₦120,000 phone, a ₦6,000 fee, and three payments of ₦42,000, the first one month after purchase. You owe ₦120,000 in month one, about ₦80,000 in month two and ₦40,000 in month three. The average is ₦80,000. ₦6,000 ÷ ₦80,000 = 7.5% over three months, or 2.5% a month, roughly 30% a year simple. A precise internal-rate calculation gives 2.48% a month: 29.8% a year simple, or 34.2% a year when compounded monthly. The quick method lands close enough to decide.
Notice the trap in the shortcut many shoppers use: 5% for three months, so 20% a year. That understates the cost by about a third, because it assumes you owe the full ₦120,000 throughout.
Shorter plans cost more per month
| Labelled example | What you borrow | Fee | Term | Rate for the term | Simple yearly rate |
|---|---|---|---|---|---|
| Pay in 3 monthly | ₦120,000 | ₦6,000 | 3 months | about 7.5% on average balance | about 30% |
| Pay in 30 days | ₦50,000 | ₦1,500 | 30 days | 3% | 36% (about 42.6% compounded) |
| Pay in 14 days | ₦40,000 | ₦2,000 | 14 days | 5% | about 130% |
| Pay in 4, first at checkout, then every 2 weeks | ₦88,500 effectively | ₦6,000 on ₦120,000 | 6 weeks | 3.35% per fortnight | about 87% |
The last row is the format many shoppers find cheapest-looking. Paying ₦31,500 at checkout means you only really borrow ₦88,500, and you repay it fast, so the same ₦6,000 fee buys much less time. Short tenor plus upfront instalment gives a high rate even when the fee feels small.
When the fee is worth paying
- When the alternative is a loan app or overdraft that costs more for the same period. Compare like for like using the method above, or see overdraft vs loan app.
- When the item saves or earns money quickly, such as a tool for work.
- When the store's cash price is the same as the pay-later price before the fee. Check this; some sellers raise the shelf price on instalment plans, which is a second hidden cost.
It is rarely worth paying for something you could buy outright in a few weeks by saving.
What to check first
- The cash price of the item, and whether it is the same without the plan.
- The fee in naira, and whether any part is paid at checkout.
- The number and dates of instalments, so you can find the average balance.
- The late charge, and whether it is a one-off sum or grows daily.
- Whether the plan pulls payments automatically from a card, and how you can stop that once you have paid in full.
Late fees and the rules
The real cost jumps if you miss an instalment. Read the late-payment terms before you accept. The FCCPC's Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 require interest, repayment terms and fees to be disclosed before any transaction, and the schedules ask lenders to itemise penalties for late or non-payment. A legal review published in October 2025 notes that the regulations reach pay-later platforms that offer goods on deferred terms. Check the FCCPC register for the provider and confirm the regulations' current enforcement status. This is information, not legal advice.
Where Pryme fits
Loans on Spaces, lent by Solid Allianze MFB and spent only with Spaces merchants, shows the amount, cost and repayment date in full before you accept, so you can run the same fee-to-rate check. Our guide What does a Loan on Spaces cost? explains where each charge appears.
Questions people ask
Is buy now pay later really interest-free in Nigeria?
Some plans charge no interest but add a fee. The fee is still the cost of borrowing, so convert it into a monthly rate before comparing.
How do I calculate the interest rate on a BNPL fee?
Divide the fee by the average amount you owe during the plan, then by the number of months. Multiply by 12 for a rough yearly rate.
Is BNPL cheaper than a loan app?
Sometimes. Work out the cost per month for each on the same amount and term; the cheaper one is the one with the lower monthly cost, provided you can repay on time.
What happens if I miss a BNPL payment?
The provider's terms set out late charges and recovery steps. Read them before you accept, because a missed payment can raise the cost far above the original fee.
Sources
- FCCPC: Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 (made 21 July 2025) · accessed Oct 2026
- TNP: Review of the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulation 2025 (22 Oct 2025) · accessed Oct 2026
- FCCPC: approved digital lenders register (via the FCCPC website) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.