Buy Now Pay Later (BNPL) is a form of instalment financing that has the potential to ease consumers’ spending burdens. Although BNPL is often considered as a modern financial innovation that facilitates budget management, previous studies have raised concerns regarding its compliance with Shariah principles and Islamic ethics. This study adopts a literature review approach to ensure a comprehensive evidence and transparent presentation of findings. Thus, the main focus of this study is to assess the extent to which BNPL service can be adapted as a budgeting tool that aligns with Shariah and Islamic ethical principles. Analysis of selected literature indicates that BNPL has the potential to become a financial management instrument that contributes to reducing the economic gap, in line with current needs. Furthermore, it has the capability to balance a technological innovation with elements of convenience, fairness and consumer protection. Improvements in regulatory guidelines, legislative frameworks and financial literacy are
recommended to be more responsive to the needs of Muslim individuals and communities, thereby ensuring the sustainability of an ethical and Shariah compliant standard of living.

KEYWORDS
BNPL, Shariah principles, Islamic ethics

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