The standard pay-in-four schedule can put repayments on the wrong side of payday, so we designed Cleo’s version to consider when users get paid.
Most pay-in-four products use the purchase date to set the repayment schedule. That works neatly from a product perspective, but it’s not always so useful for the person making the payments.
Say someone gets paid every other Friday and starts a buy now, pay later (BNPL) plan on a Tuesday, three days before payday. Under a typical pay-in-four structure, they’d make the first payment at checkout, and the others at two-week intervals. So those remaining three installments also hit their account on Tuesdays—right before payday.
Every BNPL product makes a decision about payment timing. When we built Cleo Pay Later,1 we decided that checkout shouldn’t be the reason behind that decision. Instead, we set installment dates based on the pay schedule users select. Users see the full schedule, including every payment amount, date, and fee, before confirming the plan. Instead of making the due date an accidental consequence of when someone shops, it’s an intentional part of the product design.
How the purchase date became the repayment date
The standard pay-in-four approach is simple enough. A purchase happens, the first payment is taken, and the remaining payments follow every 14 days. It also requires no information about the user’s income; the provider only needs to know when the purchase happened.
For someone managing their cash flow, though, that date can be fairly arbitrary. People shop throughout the week, but regular income tends to arrive on particular days. Having multiple BNPL plans can mean even more dates to keep track of. A Tuesday purchase creates one schedule, a Sunday purchase creates another, and a Friday purchase creates a third. Each plan is predictable, but the payments are spread across the month according to three unrelated shopping days.
We wanted Cleo Pay Later to take a different approach. During onboarding, the user enters their pay schedule. We use that income timing to set payment dates that are designed to fall around payday, and we show the user those dates before they commit.
What we heard from BNPL users
Before launching Pay Later, we wanted to understand why people miss BNPL installments. We surveyed 174 Cleo users with recent BNPL experience,2 40% of whom said they’d missed at least one installment in the previous 90 days. Among those who told us why:
41% had faced an unexpected expense.
18% said their pay arrived later than expected.
6% said the installment was larger than expected.
Most people who answered a separate question about repayment time said they’d needed only one to three extra days to make the payment.
We also interviewed seven people about payments they had missed on other BNPL products. Five described problems involving unclear dates, autopay, or payment communications. Some didn’t know that anything had gone wrong until the payment was already late.
Although we couldn’t design away an unexpected expense, we knew we could make the payment schedule easier to see and use the pay information a customer provides to set their installment dates. That became the basis for Pay Later: show the cost and schedule upfront, then design the later installments to line up with the user’s pay schedule.
How Cleo Pay Later works
Eligible users choose an amount up to $5003 and enter their pay schedule. Then Cleo lays out the whole plan: the installment amounts, transaction fee, payment dates, and when the plan will be paid off. Once the user confirms, Cleo creates a single-use virtual Visa card4 that they can use online or add to a digital wallet.
The first payment is made when the purchase goes through, covering 25% of the purchase amount plus a 5% transaction fee (capped at $7.50). The rest is split into three payments over the six-week plan, with dates based on the pay schedule the user entered. There’s no interest or revolving balance, and the user knows the full cost and final payment date before they buy.
Payday alignment can also make multiple Pay Later plans easier to manage. When a user starts another plan while an existing one is still active, Cleo can line up the later installments with the dates already in their repayment schedule. Instead of creating a new set of dates for every purchase, the plans can share the same repayment days. It’s one less thing for users to keep track of.
From managing cash flow to building wealth
Pay Later is just one way we’re expanding what users can do with Cleo.
This fall, Cleo is bringing more elements of users’ financial lives into one place. Someone might use Pay Later for a planned purchase today, build a buffer in Cleo Savings over the next few months, and then start growing long-term wealth with Cleo Invest.
And users can chat with Cleo about all of it to understand what’s happening with their money and explore how a decision in one area might affect their overall financial picture. That personalized context means Cleo can respond to each user as an individual, instead of relying on the same defaults for everyone.
Pay Later also gives Cleo another way to help with short-term cash flow. While cash advances are designed to cover an immediate gap between paydays, Pay Later can help with a planned purchase that someone wants to divide into a fixed set of payments. The same user might need one or the other at different points. Now Cleo can support both.
That’s where the decision to build Pay Later around payday fits into the larger Cleo story. It changes one of the basic mechanics of pay-in-four so that we can center what matters to the user. Pay Later begins with a purchase, but it belongs in a set of products designed to support much more: what users need to pay for now, what they want to save for next, and what they hope to build over time.
1 Cleo Pay Later loans are originated by WebBank and subject to credit approval. For example, for a $250.00 Pay Later Loan, you would make one $70.00 payment due at purchase, which includes the $7.50 Finance Charge (Transaction Fee). Assuming the second installment payment of $62.50 is due 18 days after purchase, you would make that payment, followed by two additional payments of $62.50 due every two weeks. The Total of Payments would be $257.50 at an Annual Percentage Rate (APR) of 47.0%. Actual terms, fees, and payment dates are provided after final loan amount determination. Late fees may apply. Certain merchant, product, goods, and service restrictions apply. See the Cleo Pay Later Loan Agreement and FAQs for complete terms and details.
2 Based on internal Cleo data as of November 2025.
3 Pay Later is subject to eligibility, identity verification, and an ability-to-pay assessment. The amount shown before you complete onboarding is an estimated "up to" spending power based on your eligibility, not a guaranteed or final amount. After these checks, your actual spending power may be lower than the amount shown. The average spending power for approved users between June 2026 to August 2026 was $250. Spending power varies and amounts are subject to change.
4 Cleo Pay Later Virtual Cards are issued by WebBank pursuant to a license VISA U.S.A. Inc. See User Agreement for details. Cleo provides access to financing in the form of installment loans. Cleo is not a bank.
