Home / Payments / How Does Laybuy Work?

How Does Laybuy Work?

What is Laybuy?

Laybuy is a BNPL (Buy Now Pay Later) provider that is available in the UK. The fintech company was founded in New Zealand in 2017 by Gary Rohloff and family members. It has since expanded, and is now available in Australia and the UK where it was launched in 2019.

Since 2019, Laybuy is also listed on the ASX (Australian Stock Exchange, ISIN: NZLBYE0001S0). According to company data published on Laybuy’s investor relations website, the company has as of January 2022 almost 13,000 merchants of which 3400 are UK based and 930,000 active customers in total of which 603,000 are based in the UK.

As of February 2022 – they are not profitable.

How does Laybuy work?
How does Laybuy work? / Picture: iStock.com | giraffarte


How does Laybuy work?

A Laybuy account is required for using Laybuy. Details of a credit or debit card as a payment authority are also required to complete the account set up and to make purchases.

On sign-up Laybuy also performs a credit check and allocates a limit to the account. This is the amount the customer can spend using Laybuy. The limit may change depending on the repayment history.

The service is available with merchants that have been approved by Laybuy and purchases can be made via the web, app or in-store.

The payment process is simple:

  1. Select Laybuy at the check out
  2. Log into your account
  3. Select a payment day
  4. Complete your order

Laybuy also allows to settle the outstanding amounts earlier and in full via the app whenever desired.

Laybuy Boost

This feature allows to spend above the set limit on the account.

Example – If the account limit set by Laybuy is £300, but the cost of an item is £400, the customer pays the difference between the limit and the purchase price – in this case £100 – at the time of the purchase. The remaining £300 is then payable in 5 weekly installments of £60.


Laybuy pays the merchant/seller the full amount of the purchase price once the purchase has been made by the customer. Therefore, in the event that the customer wants to return an item, Laybuy will wait until the money has been refunded by the merchant before any refunds are made to the customer/buyer. Once they receive the refund from the merchant, it may take an additional 5-7 days until the refund reaches the customers bank account according to their Terms & Conditions.

Laybuy Cards – Whats the difference?

The Laybuy virtual card

The Laybuy virtual card is only available with exclusive merchants and only via the app or the shop directory. The card will be unlocked when it is time to pay for an item or service.

The Laybuy card

Laybuy offers a digital Mastercard that can be added to the smartphone wallet, that can then be used for tap & pay in selected stores.

Laybuy Features

Below are the key features of Laybuy:

Pay in 6Split payments into 6 payments. One on the day of purchase, the rest in 5 weekly instalments.
Tap & PayAdd the Laybuy Mastercard to the wallet on the smart phone to pay at Laybuy approved stores
Zero InterestNo interest on purchases
Laybuy BoostLets you spend above your limit. The difference between purchase price and limit is due at the time of purchase

How much does Laybuy cost?

The service is free to use for the customer or buyer. Laybuy charges the merchant/seller a fee to use their service (4% – 10% of the order value).

Like all the other BNPL providers, they do not charge any interest.

Late fees

Laybuy applies late fees for late payments. If a payment is 24 hours late, Laybuy charges a 6 GBP fee and another 6 GBP after 7 days if the payment has still not arrived. Each missed payment on an installment can cost up to 12 GBP for a missed or late payment, and up to 24 GBP for the entire purchase.

Laybuy also state in their Terms & Conditions, that they may arrange for a debt collection agency to retrieve the money for the failed payments.

Who is Laybuy for?

In order to be able to use Laybuy in the UK, users must meet certain requirements:

  • Must be at least 18 years old
  • Must be resident of the UK
  • Must have a valid email address
  • Must have a valid credit or debit card to set up as payment authority
  • Must have a valid drivers licence or passport

Credit checks – Laybuy state in their Terms & Conditions that they run a credit check to determine the eligibility and allocate a limit to the account.

Is Laybuy safe?

Laybuy’s service is not regulated by the Financial Conduct Authority. However, the same applies to Klarna and Openpay, which are some of Laybuy’s competitors. The lack of regulations seems to be so far quite standard in the BNPL space. However, since this is such a fast growing market, there has been some concerns from the Financial Conduct Authority (FCA). Recently, the FCA was able to get some changes underway in regard to how some terms, that they felt were ultimately misleading, were drafted.

Laybuy Reviews – what are people saying?


On Trustpilot the majority of users rates Laybuy favourably. Out of over 5k reviews they have a rating of 4.2 with 80% of the reviews being either Excellent or Good. Users say that it is easy to use, and love the fact that they can split the payments and thus spread the cost of their purchases. Some users also mentioned that their customer support was fast to respond and helpful.

15% of the reviews are rated as bad, the lowest possible score on Trustpilot. The negative reviews are based on the fact that Laybuy can be hard to contact. Some people mentioned that false accounts have been created in their name. Customers have also complained about the fact that there is no telephone number to contact in the event of an emergency and that the email response is slow. Some have also mentioned that the refund process takes a long time.

Laybuy Alternatives

All of the above offer slightly different payment terms. Klarna has 3 instalments, where the last payment is cleared after 60 days. Zilch offers 4 instalments where the last payment is made after 42 days, giving the customer slightly longer repayment periods.

Out of all the above mentioned BNPL providers, Zilch is the only one that is regulated and authorised by the Financial Conduct Authority.

Laybuy Pros and Cons


Easy to use

Clear payment structure

More than 3400 stores

Interest free purchases

Tap & Pay card for in-store purchases

Pay in 5 instalments


Short repayment period

Returns process seems clunky

Not regulated

No telephone contact

Late payment fees

Collection agencies may be used for missed payment


There are a lot of BNPL providers out there these days and customers are spoilt for choice. Most of them don’t differ by much. For people who are on top of their finances, it can be a good way to spread the cost of purchases over a period of time. Further, since only 1/6th payment is due at the time of purchase, there is less money to be waiting for in case of a return/refund. However, the returns process may be a bit inconvenient for items that are more likely to be returned such as clothing and shoes.

What anyone who opts in to use any BNPL service should know is that even though Laybuy doesn’t charge interest, they act as a lender of credit because they pay the merchant in full. The customer needs to make sure that the installments are paid on time as there are fees applied for late payments. Laybuy may also involve credit collection agencies to retrieve missing payments.

Therefore, while these services can come in handy at certain times, they should be used with caution and only if there is a plan and sufficient funds available for timely repayments.