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Part of the guideOffer pay-later in Nigeria: get paid today, customers pay later
The short answer
Settlement is the moment a pay-later provider pays your business for sales your customers will repay later. Providers usually pay in batches, same day, next day or weekly, and most pay net, with fees and refunds already deducted. Compare settlement timing alongside the fee, because a slow schedule ties up cash, and reconcile every settlement against individual sales.
When a customer pays by bank transfer, the money is in your account in seconds. When a customer buys on pay-later, the sale is confirmed in seconds but the money arrives later, on the provider's schedule, often bundled with other sales and net of fees. Understanding that schedule is as important as understanding the fee. This article explains how it works and how to keep track; the wider guide is offering pay-later in Nigeria.
The terms you will see
- Settlement
- The payment from the provider to your account for sales already confirmed.
- T+0, T+1, T+7
- Shorthand for when you are paid: the same day as the sale (T+0), the next business day (T+1), or a week later (T+7).
- Batch
- One payment covering many sales over a period, usually with a report listing them.
- Gross and net
- Gross settlement pays the full sale value and bills fees separately. Net settlement deducts fees, and often refunds, before paying you.
- Settlement report
- The provider's list of every sale, fee, refund and adjustment in a batch. You need it to reconcile.
- Clawback
- Money the provider takes back from a later settlement, for example after a dispute or fraud, if the agreement allows it.
- Reserve or holdback
- A share of your settlements the provider keeps for a period as cover against refunds or disputes. More common for new or high-risk merchants.
How the money moves
- The customer chooses pay-later at your counter, link or checkout and confirms on their own device.
- The provider confirms the purchase. You hand over the goods or provide the service.
- The sale joins the provider's batch for that settlement period.
- At the cut-off, the provider adds up your sales, deducts fees, refunds and any clawbacks, and sends the net amount to your nominated business account.
- You receive the settlement report and match it against your own sales records.
- Separately, the customer repays the provider. You are not involved in that.
In Nigeria, the regulated rails underneath also matter. Under the CBN's framework for non-bank acquiring, non-bank acquirers may not hold merchant funds directly; settlement runs through a sponsoring bank. A pay-later provider is a lender rather than an acquirer, but it should still pay you from a regulated account into an account in your business's name, and you should know which institution that is.
Worked example: what waiting costs
A supermarket makes ₦400,000 a day in pay-later sales. It buys stock with cash and covers gaps with an overdraft costing, for illustration, 30% a year. The table compares settlement schedules.
| Schedule | Average money waiting for settlement | Illustrative financing cost a month (30% a year) |
|---|---|---|
| T+0 (same day) | Close to nil | Close to nil |
| T+1 | About ₦400,000 | About ₦10,000 |
| Weekly batch | About ₦1,600,000 | About ₦40,000 |
| Fortnightly batch | About ₦3,000,000 | About ₦75,000 |
With weekly settlement, sales from the start of the week wait up to seven days and those from the end wait one, so on average about four days' sales are outstanding. Monthly pay-later sales here are about ₦12,000,000, so a ₦40,000 financing cost adds about 0.33 percentage points to the effective fee. A provider charging 3% with weekly settlement can cost more than one charging 3.2% with next-day settlement. Put both numbers side by side, as suggested in pay-later merchant fees in Nigeria.
Settlement timing also affects tax and supplier planning. If you pay suppliers weekly and the provider settles weekly on a different day, you may need a few days' buffer in your account. Line the two up where you can.
Refunds, disputes and clawbacks
With card payments, disputes run through the card scheme, and the CBN cut the timeline for resolving POS and web disputes to 48 hours in 2020. Pay-later disputes follow the provider's own process, set out in your merchant agreement. Know these answers before you go live:
- Refunds: do you refund the provider directly, or does the provider deduct the refund from your next settlement?
- Fee on refunds: is the fee returned when a sale is refunded in full or in part?
- Disputes: how long does the provider take to decide a customer complaint, and is the money held during that time?
- Clawback cases: exactly when can the provider take money back after settling, and how far back?
- Reserves: will any share of your settlements be held back, for how long, and when is it released?
Reconciling settlements every week
Net batch settlement is convenient, but it hides detail. A single credit of ₦2,184,300 might be 23 sales, two refunds and a week of fees. Without a routine, gaps go unnoticed until year-end.
- Tag every pay-later sale in your till or books with the provider's confirmation reference.
- When a settlement arrives, download the report and match each line to a sale.
- Record the sale at full price as revenue and the fee as a separate cost, not as reduced revenue.
- Record refunds against the original sale.
- List anything confirmed but not yet settled, and chase it after one missed cycle.
- Keep tax money aside on the sale date; VAT and consumption tax are due on your normal schedule, not when settlement arrives.
Doing this weekly takes minutes. Doing it six months later, across hundreds of sales, can take days. If you are moving customers off an informal credit book, running your own store credit vs using a provider shows how settled cash compares with money owed by customers.
Where Pryme fits
For Spaces, Pryme's merchant network for pay-later in Nigeria only, the credit is lent to the customer by Solid Allianze Microfinance Bank Ltd, a CBN-licensed microfinance bank; Pryme Financial provides the technology. That gives you the answer to "which institution" above for the lending side. Customers see and accept their own credit agreement before any purchase is drawn, and a Spaces limit can be spent only with businesses that have joined Spaces. The settlement schedule, fee treatment and refund process for Spaces are not published here; before you join, ask for them in writing, together with a sample settlement report, at support@mypryme.com, and check the answers against the questions above.
For sales paid in full, Checkout takes bank transfers free of charge. A Pryme business account comes with a Finance agent that prepares work for a person on your team to approve; whatever tools you use, the weekly routine above is what keeps settlements reconciled. The parent guide covers why settlement speed matters when you restock daily.
Questions people ask
When do merchants get paid for buy now pay later sales?
It depends on the provider. Some settle the same day, others the next business day or in weekly batches. Get the schedule in writing before you sign.
Do BNPL providers pay merchants the full amount?
Most pay net, deducting their fee and any refunds before paying you. Some pay gross and bill fees separately. Either way, record the sale at full price and the fee as a cost.
Can a pay-later provider take money back after paying me?
In some cases. Even non-recourse agreements usually allow clawbacks for fraud, refunds and disputes over goods or services. Check the list in your agreement.
How do I reconcile pay-later settlements?
Tag each sale with the provider's confirmation reference, match it against the settlement report each week, and chase anything missing after one cycle.
Is slow settlement a real cost?
Yes. Money waiting for settlement has to be covered from your own cash or an overdraft. Weekly settlement can add a fraction of a percentage point to the effective fee.
Sources
- Aelex: Overview of the CBN Regulatory Framework for Non-Bank Acquiring (2021) · accessed Oct 2026
- CBN: Regulatory Framework for Non-Bank Acquiring in Nigeria 2021 · accessed Oct 2026
- TNP Insights: CBN chargeback period reduction for ATM, POS and web transactions (2020) · accessed Oct 2026
- FCCPC: Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025 · accessed Oct 2026
- Forvis Mazars: VAT and Nigeria's 2025 tax reforms · 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.