Buy Now, Pay Later For Ecommerce: What To Consider

New consumer behavior trends are emerging in this digital age — Buy Now, Pay Later (BNPL) options being one of the more popular trends. A report by Insider Intelligence projects the Buy Now, Pay Later industry to generate $680B in transaction volume worldwide in 2025.

BNPL options are financing options that recently became popular, exacerbated by COVID-19 and recent consumer behavior trends. These alternative payment options, especially popular among younger generations, offer shoppers a flexible method to buying products, allowing them to pay over fixed installments or over a period of time.

Let’s dive into what BNPL exactly is, why shoppers prefer this alternative payment method, and if it’s the right option for your ecommerce store.

What are Buy Now, Pay Later options

Buy now, pay later options allow shoppers to finance purchases over time, offering an alternative payment method different from a traditional credit card. The most common BNPL structure consists of interest-free installments where shoppers pay for their purchases in fixed installments — The pay in 4 model-payment plan being the most common.

With the rise of BNPL, and 50% of shoppers having used a buy now, pay later service, it’s vital that retailers offer this alternative payment method.

Some shopper trends associated with the increasing adoption of BNPL are:

• Buying more and more frequently
• Spending more money , even on bigger ticket items that are now more manageable with installments
• Expecting this convenient payment method as a fixture in the online shopping experience

Why shoppers use buy now, pay later options

Shoppers use BNPL for various reasons. In fact, research shows that 33% of US consumers have used a BNPL payment option. And according to a recent survey, 62% of shoppers opt for BNPL to save money.

Other reasons for using BNPL methods include:

• Avoiding high credit card fees and interest rates (39.4%)
• Not being able to afford large ticket purchases (38.4%). With BNPL, shoppers don’t have to pay the full amount up front which makes larger purchases less daunting.
• To borrow money without a credit check (24.7%)
• Having negative sentiments towards credit cards in general (16.3%). Many shoppers dislike credit cards and all the processing and interest fees associated with them.

Why should your ecommerce store consider buy now, pay later

Ecommerce stores should consider and offer BNPL because it's native to ecommerce checkout.

By offering this alternative payment method, retailers

• Reach a wider customer base, unlocking more sales and revenue along the way.
• Increase customer LTV and establish loyalty, ensuring more consistent revenue. 
• Receive payment up front. With BNPL, customers pay for their purchases in installments, and retailers still receive the payment up front. This protects you against potential fraud, since BNPL servicers assume all responsibilities.
• Increase conversion. Splitting up payments in installments makes bigger purchases feel less daunting for shoppers. This means they’re likely to spend more, and more often, leading to higher conversions for you.

Many stores are already offering BNPL options, so it’s important to stay up to date with consumer behavior trends, especially among the younger generations— Gen Z and Millennials.

Bolt makes it simple to use buy now, pay later payment methods for seamless transactions. Bolt One-Click Wallet offers various alternative payment methods, including BNPL options, in just one place. Satisfy your customers by offering BNPL options along with one-click checkout to create a superior shopping experience

What are some of the major Buy Now, Pay Later options

Some major buy now, pay later options are from companies like Affirm, Klarna, Paypal, and even Apple Pay Later. Specific BNPL companies like Klarna, Affirm, and Afterpay offer BNPL at the point of sale (POS) and are leading the movement.

Here are two common payment structures for BNPL: 

• Pay later where shoppers pay the full amount after a certain amount of time has passed
• Pay in installments where the full price is split between a fixed number of payments.

Other factors to consider when choosing BNPL options include varying interest rates, fees, and payment structure, and integration capabilities with your existing checkout stack. Satisfy your shoppers with Bolt One-Click Wallet which offers different buy now, pay later options in just one place along with a shockingly simple checkout.

Pros of buy now, pay later

BNPL options serve as a great alternative payment option for retailers who are looking to increase conversion rates, offer more flexible payment methods, and reach a larger customer base. Here are some pros:

• Unlock wider customer base: Make purchases more affordable for your customers, allowing them to pay in installments over time with BNPL options. This is especially popular among the younger generation, so you can appeal to this customer base as well.
• Higher conversion rates: Since payments are broken up in smaller interest-free installments, customers feel less risk towards purchasing more items. This leads to higher conversion rates for your business. Customers are likely to buy more and more often.
• Higher Average Order Values: Retailers will see an increase in higher average order values, since customers are likely to finance higher ticket items through more manageable installments.
• Offer more flexible payment methods: Empower your customers to buy goods in the method they prefer. Customers love personalization. Offer BNPL as an alternative payment method to stay up to date with consumer trends.

Cons of buy now, pay later

Like any other credit methods and loan options, buy now, pay later options also have some downsides. Here are some risks to consider before offering BNPL:

• Higher merchant Fees: BNPL servicers charge both merchants and shoppers fees to offer and use their services.
• Difficult to implement and maintain: It can be costly for merchants to integrate a BNPL option to their standard checkout process.
• Wrong orders/order delivery issues: If a customer receives a wrong order, it might be trickier to resolve the issue since you’d have to work with both the BNPL servicer and the customer.
• BNPL still being relatively new: This means that BNPL servicers could lack oversight and safeguards that more traditional payment methods like credit cards and loan servicers might offer.

How to get started with buy now, pay later

It’s safe to say that BNPL payment methods are here to stay. BNPL appeals to customers who can’t afford the full-price of products, who want to avoid high credit card fees and interest rates, and are influenced by the convenience of this financing option. With the sea of choices in the BNPL industry, it can be hard to choose which one is the best fit for your business.

Bolt makes it easy to offer alternative payment methods in one place with Bolt One-Click Wallet. With Bolt’s One-Click Wallet, retailers can offer both BNPL options and a shockingly simple one-click checkout experience.

Not only that, but Bolt’s One Click wallet is the industry’s first and only commerce wallet that extends one-click checkout beyond credit cards to all payment methods, starting with PayPal. With Bolt, you can allow shoppers to connect, save, and manage all their APMs in one place, reduce abandoned cart rates, and see higher conversion and account registration rates.