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Part of the guideOffer pay-later in Nigeria: get paid today, customers pay later
The short answer
Hotels and serviced apartments can let guests spread the cost of multi-night stays, monthly lets and event packages through a pay-later provider, which pays the property and collects from the guest. It suits longer, planned stays more than single nights. Before offering it, settle three things in writing: when payment is taken, how cancellations and early check-outs are refunded, and whether the fee is charged on the tax-inclusive bill.
A single night in a hotel is usually paid in full at check-in. A two-week stay for a family visiting from abroad, a month in a serviced apartment while a house is finished, or a wedding block of ten rooms is different: a large, planned sum that many guests would rather spread. This article covers how pay-later works for accommodation businesses. For the general picture, see our guide to offering pay-later in Nigeria.
Which bookings suit pay-later
| Booking type | Fit | Why |
|---|---|---|
| Single night, walk-in | Poor | Small ticket; guest usually pays by transfer or card |
| Multi-night leisure stay (5 to 14 nights) | Good | Large, planned spend, often around holidays when cash is stretched |
| Monthly serviced apartment or shortlet | Strong | Very large sum; spreading it brings it closer to a monthly rent |
| Wedding or event room blocks | Good | One family pays for many rooms at a peak cost time |
| Hall hire and event packages | Good | Big outlay booked weeks ahead |
| Corporate travel | Usually poor | Companies pay on invoice; the guest is not the payer |
Nigeria's hotel trade has been doing better: BusinessDay reported in July 2026 that listed hotel operators had posted their highest profits in five years as the economy steadied. Pay-later is not a fix for empty rooms, but it can help a property win longer, higher-value bookings from guests who want to stay and need time to pay.
Worked example: a family stay and a monthly let
The figures below are illustrative. They assume a 3% merchant fee and use the Lagos consumption tax of 5% as an example of a tax collected on the bill.
Seven nights at ₦85,000
- Room revenue: ₦595,000.
- Lagos consumption tax at 5%, collected from the guest: ₦29,750, so the bill is ₦624,750 before any VAT.
- Fee at 3% on room revenue only: ₦17,850. Fee at 3% on the tax-inclusive bill: ₦18,743.
- Net room revenue after the fee: between about ₦576,000 and ₦577,000.
One month in a serviced apartment at ₦1,800,000
- Fee at 3%: ₦54,000.
- If the alternative is the guest booking two weeks instead of a month, the property loses ₦900,000 of revenue. If it is the guest going to a competitor, it loses ₦1,800,000.
- If the guest would have paid the full month by transfer anyway, the ₦54,000 is a pure cost.
Hotels have high gross margins on rooms, because most costs, such as staff, power and the building, are fixed. That means the break-even uplift is small: putting 20% of room revenue through pay-later at 3% with a 70% room margin needs less than a 1% rise in revenue to pay for itself. The risk is offering it on bookings that would have paid in full anyway. For the fee arithmetic in detail, see pay-later merchant fees in Nigeria.
Deposits, cancellations and early check-outs
Accommodation is paid before it is used, often well before. That creates questions retail does not have.
- When to take payment. Decide whether pay-later is used at booking, as a deposit, or at check-in. Taking it at booking secures the room; taking it at check-in avoids refunds for no-shows.
- Cancellation policy. Write it down and show it before payment, for example: full refund up to 7 days before arrival, 50% up to 48 hours, nothing after that.
- Refund route. A refund on a pay-later booking usually goes back to the provider, which reduces what the guest owes. Agree the timelines, and ask whether the provider returns its fee on the refunded part.
- Early check-out. If a guest on a 14-night stay leaves after 9, your policy decides whether the unused nights are refunded. Apply the same rule however the guest paid.
- Incidentals. Keep room service, bar and laundry on a separate bill paid at check-out, so the pay-later amount matches the room booking exactly.
- Damage deposits. Do not try to hold a damage or security deposit through pay-later. Take it separately and return it separately.
Tax on the bill
The standard VAT rate remains 7.5% under the Nigeria Tax Act 2025, which took effect on 1 January 2026; small businesses with turnover of ₦100 million or less and fixed assets of no more than ₦250 million are exempt from charging it. In Lagos, the Hotel Occupancy and Restaurant Consumption Law adds a 5% consumption tax, paid by the guest and remitted by the hotel to LIRS by the 20th of the following month. Other states have their own rules.
Two practical points follow. First, ask the provider whether its fee is charged on the tax-inclusive total, because otherwise you pay a fee on money that belongs to the tax authority. Second, tax is due on your normal schedule regardless of when the provider settles, so keep the tax portion aside. How merchant settlement works with pay-later explains how to match settlements to bookings.
Offering it to guests
Show the option on the booking page and in the confirmation message for stays above a minimum, such as three nights. Front desk staff should mention it when a guest asks about a longer stay or a group booking, and leave the decision to the guest. The FCCPC's 2025 digital lending rules make credit opt-in: each use must be requested by the consumer. How to tell customers you offer pay-later covers wording that works at reception and online.
Online bookings need the same care as the front desk. If guests can choose pay-later on your website or through a booking link, make sure the cancellation policy and the total, including taxes, appear before the guest selects a payment method, not after. A guest who discovers a non-refundable rule only after accepting a credit agreement is likely to complain to both you and the provider.
Where Pryme fits
Hotels and serviced offices are among the participating categories for Spaces, Pryme's merchant network for pay-later in Nigeria only. Guests with a Pryme account may be offered a naira spending limit based on how they run their account, and they see and accept the full agreement before anything is drawn. The credit is lent to the customer by Solid Allianze Microfinance Bank Ltd, a CBN-licensed microfinance bank; Pryme Financial provides the technology. A Spaces limit can be spent only with businesses that have joined Spaces, so a guest holding one is looking for a place to stay inside the network. If you run serviced apartments or shortlets, which are not named in that list, ask before planning around it. Ask too, in writing, for the merchant fee, settlement timing, whether payment can be taken at booking or at check-in, and how cancellations are refunded, at support@mypryme.com.
For guests paying in full, Checkout takes bank transfers free of charge. The parent guide explains who carries the risk when customers pay later.
Questions people ask
Can hotels in Nigeria offer buy now pay later?
Yes, through a provider registered with the FCCPC or licensed by the CBN. It works best on multi-night stays, monthly serviced apartments and event bookings rather than single nights.
What happens if a guest cancels a booking paid with pay-later?
Your cancellation policy decides any refund. The refund usually goes back to the provider, which reduces what the guest owes. Agree the process and timelines with the provider beforehand.
Should we take pay-later at booking or at check-in?
At booking secures the room but creates refunds for cancellations and no-shows. At check-in avoids that but gives less certainty. Many properties take a deposit at booking and the balance at check-in.
Is the pay-later fee charged on hotel tax?
It depends on the provider. Ask whether the percentage applies to the tax-inclusive bill, and record VAT and consumption tax on the full amount whatever the settlement shows.
Can shortlet apartments use pay-later?
Yes, if the provider accepts them as merchants. Monthly lets are one of the strongest uses, because the sum is large and guests often prefer to spread it.
Sources
- BusinessDay: Listed hotel operators post highest profit in five years (July 2026) · accessed Oct 2026
- Techeconomy: LIRS tasks businesses on 5% consumption tax compliance · accessed Oct 2026
- Forvis Mazars: VAT and Nigeria's 2025 tax reforms · accessed Oct 2026
- FCCPC: Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025 · accessed Oct 2026
- Berg, Burg, Keil and Puri: The Economics of Buy Now, Pay Later: A Merchant's Perspective (NBER w33152; Journal of Financial Economics, 2025) · 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.