Buy now, pay later (BNPL) services are projected to grow significantly, reaching $687 billion by 2028 due to their appeal of splitting purchases into interest-free installments, which attracts both customers and fraudsters. Unlike traditional credit cards, BNPL services have quick approval processes and minimal credit checks, making them vulnerable to various types of fraud, such as account takeovers, new account fraud, synthetic identity fraud, and repayment fraud. Fraudsters exploit these systems by creating multiple accounts, using stolen identities, and taking advantage of limited cross-platform communication among BNPL providers. This results in financial losses for retailers, including lost merchandise, chargeback fees, and decreased customer trust. To combat BNPL fraud, businesses must implement strong identity verification, multi-factor authentication, and real-time transaction monitoring using AI and machine learning to detect and prevent fraudulent activities. As BNPL services continue to expand, the sophistication of fraud tactics also increases, necessitating a multi-layered approach to fraud prevention to protect businesses effectively.