Buy Now, Pay Later (BNPL) is taking the payments industry by storm. BNPL refers to customers taking home their purchases and paying in installments for them over time. Most BNPL companies do not charge interest if you pay on time. But if you miss a payment, you are likely on the hook for a late fee.

Research indicates that more than one-third of U.S. e-commerce brands plan to offer purchase financing options in the next 12–24 months due to its many benefits. Read on to learn why you should offer buy now, pay later options on your e-commerce site.

Buy Now, Pay Later Benefits


Younger Buyers Prefer to Buy Now, Pay Later

Younger consumers are driving the trend of buy now, pay later. Data from the Survey of Consumer Finances shows that there has been a decline in young Americans holding credit card debt, compared to older Americans. Younger buyers still need a convenient way to pay overtime, but without the interest. That’s why many are looking to buy now, pay later options. BNPL gives younger buyers the freedom to pay over time without being charged additional money. Many big named brands and companies are adding BNPL options to their e-commerce sites, which is driving more demand for BNPL options.

Potential Increase in Sales

One of the biggest perks for merchants of buy now, pay later options is the potential to increase online sales by encouraging undecided shoppers to commit to their purchase. According to Afterpay, the buy now, pay later approach maximizes customers’ purchasing power: their retailers report as much as a 50% increase in average order value, and 2-3x more units per transaction. Many consumers use buy now, pay later as an option when they cannot afford the product(s) they are purchasing, and are more eager to buy when offered a payment plan.

Buy Now, Pay Later Improves Customer Experience

According to data from a Citizens survey, 76% of U.S. consumer respondents said they would be more likely to make a purchase if they were offered a payment plan with a seamless point-of-sale experience. Buy now, pay later can help businesses modernize payment processes by providing customers a flexible and manageable way to pay at the point of checkout. Businesses would benefit from implementing a seamless, white-labeled BNPL solution that displays all the information customers need about financing in front of them before checkout.

Buy Now, Pay Later Builds Trust For Your Products

Buy now, pay later has made it possible to offer new a new type of trial period for consumer products. By purchasing with a buy now, pay later solution, consumers can test out the product without committing to the full amount of the purchase. If they like the product, they can pay as usual. If not, they can return it without having to worry about receiving a full refund since they haven’t paid much, if anything, yet. This may give consumers enough confidence in your product to risk the possibility of return and make a better judgment for themselves.

Buy Now, Pay Later Decreases Cart Abandonment

Research suggests that in 2018, shoppers left more than $34 billion in their online carts or nearly 7% of all digital commerce that year. If retailers provide additional financing options, conversion rates may improve. Many consumers are looking for a financing option when they get to the checkout page now that buy now, pay later has become so popular.

Many Consumers Already Use Buy Now, Pay Later Services

According to research by, 56% of Americans have used a buy now, pay later service, up from 37.65% in July of 2020. Many consumers use BNPL services due to the smooth checkout process. Consumers don’t have to enter card details or a billing address; they only need to login to their buy now, pay later account.