Credit no longer waits for the borrower to seek it. It appears inside a checkout page as a payment option, decided in the seconds between selecting it and completing the order.
Who the parties actually are
The merchant displays the option but rarely provides the credit. A specialist provider underwrites, funds and collects it.
The merchant is paid in full, usually immediately, minus a fee. The provider takes on the repayment relationship and the risk of non-payment.
To the customer this is invisible. The credit agreement is with a company they may not have chosen and may not recognise later.
Why merchants pay for the option
Spreading a cost lowers the apparent price at the moment of decision, which reduces abandonment on larger baskets.
Average order values also rise, because a payment split into instalments is compared against a smaller monthly figure rather than the full amount.
The fee is treated as a marketing cost measured against additional completed sales, which is why merchants accept a rate well above card processing.
How decisions are made in seconds
Underwriting at checkout cannot involve documents. It relies on data available instantly, including the provider's own record of the customer and, increasingly, bank transaction data.
Limits are set low at first and raised as a repayment record accumulates, which contains the risk of deciding quickly on little information.
The economics tolerate a level of loss that would be unacceptable in traditional lending, because the terms are short and merchant fees cover much of it.
Why visibility to other lenders lags
Short-term instalment credit has historically been reported inconsistently to credit agencies, so a borrower could hold several such agreements invisibly.
Another lender assessing affordability might therefore not see commitments that materially affect the borrower's monthly obligations.
Reporting has been extended in several markets, though coverage and timing still vary between providers and between agencies.
Where the model is heading
The same infrastructure has moved beyond retail into travel, healthcare, business software and larger purchases with longer terms.
As terms lengthen, the product resembles conventional lending more closely, and regulators in several markets have moved it towards the same disclosure and affordability rules.
The distinguishing feature is not the credit itself but its placement, and placement at the point of decision is what changes how often it is taken.