The Best Buy Now, Pay Later Options For E-commerce

best buy now pay later options for ecommerce

Buy Now Pay Later (BNPL) solutions rapidly grew during the pandemic by a staggering 970%  between 2019-2021, per a CFPB study. More and more consumers are preferring BNPL to credit cards to finance their online purchases. So, integrating one with your point of sale can give you a competitive edge.

Here’s everything you need to know about BNPLs, their benefits, the best service providers, and factors to consider before choosing a buy now, pay later option.

What is Buy Now, Pay Later?

Buy now, pay later is a payment service that allows the merchant to receive the full amount of purchases upfront while customers pay for them later in installments. 

The payment arrangements are flexible, usually split into 3-4 installments. Most buy now pay later options and providers have no extra fees or interest to pay, provided you pay on time. Some providers also have monthly packages at a fixed interest rate.

The surge of consumers using BNPL services comes from them being a great alternative to credit cards.

Customers can borrow money without a credit check and avoid paying hefty interest. For those who don’t use credit cards, these services provide a convenient way of making purchases that would otherwise not fit their budget.

What Are The Benefits Of Buy Now, Pay Later Tools For E-Commerce?

Touted as the next big thing in online shopping, here are some of the benefits of using BNPL systems for eCommerce businesses: 

Attracting New Customers

The demographics of online shoppers point to young people being the majority. However, this demographic also needs more time to build their credit history and doesn't qualify for substantial amounts from credit card providers.

With a BNPL, they easily qualify to borrow as the requirements are easier to meet than traditional borrowing methods. 

BNPL also gives the great advantage of people purchasing the things they want/need before the next payday.

Integrate BNPL services in your checkout systems, and you can tap into this booming customer pool. 

BNPL platforms add participating businesses to their marketplaces so people can discover your shop and buy your products. Check out Afterpay’s U.S. retailers with links to their pages.

online shopping

Encourages High-Value Purchases

With a flexible repayment structure, customers can now buy products they would have previously left out of their shopping carts. 

They make an upfront payment (usually 25% of the value) and can conveniently pay the remainder in several installments per the agreement's terms. 

You can increase your business's average order value (AOV) and sales volume, giving you more income to expand your operations and boost your brand awareness.

Increases Conversion Rates

BNPL borrowing requests are typically approved in a matter of seconds as the companies only do a soft credit check on the customer's finances before approval. 

Platforms such as Shop Pay also save customers' details and autofill them in subsequent purchases. It increases your conversion rates as the customers visiting your website can quickly and seamlessly complete their purchases. A report by RBC Capital Markets puts the increase rates at 20-30! Impressive, right?

Boosts Return Purchases

The easier it is for customers to make payments, the more likely they will continue buying from your shop even if they have a less-than-perfect credit score. The more they keep shopping, the more their spending limit increases. Besides, they also qualify for huge discounts and vouchers, which helps build brand loyalty.

10 Best Buy Now, Pay Later Tools for E-commerce

Buy Now, Pay Later tools to help you run and grow your business through a unique and transparent product financing model. Here’s an overview of the best ten BNPL eCommerce platforms based on popularity and functionality. 

  1. Afterpay

Founded in Australia in 2014, Afterpay has become one of the biggest BNPL platforms globally, with over 19 million active customers. Currently, it also operates in the U.S., Canada, U.K, Spain, Italy, France, and New Zealand. 

Afterpay seamlessly integrates with the online store's checkout process. Customers can start making purchases in select online retailers immediately after they sign up for a free Afterpay account. 

No credit checks are required, and customers must pay 25% of the cost upfront. No interest or fees are charged on the subsequent payments when paid on time. Spending limits start from $500 and gradually increase with frequent transactions and on-time payments.

Key Features
  • 6 – week repayment period in 4 equal installments 
  • Maximum spending limit for new users: $500
  • Maximum spending limit: $1,500
  • Minimum order value: $35
  • 8% Late fee
  • Afterpay Virtual Card
  • Mobile App
  • Soft credit checks
  • No fees/interest
  • Secure, 2-factor authentication login
  • Payment reminders (Email and SMS)
  • Over 3,000 listed retailers
  • Supports refunds and returns
  • The 8% late fee is calculated weekly
  • The defaulter's account is frozen until fees are paid in totality

2. Affirm


Affirm is an American fintech company founded by PayPal co-founder Max Levchin in 2012. It partners with eCommerce businesses to provide flexible, stress-free financing options for their customers. It helps you maximize checkouts and open your business up to over 12.7 million prospective customers in the U.S. and Canada who use their services regularly.

Affirm has two payment options, interest-free Affirm Pay in 4 or Monthly Payments at a fee for big purchases rolled over an extended period.

We particularly love the Affirm Prequalification feature, which lets customers know in advance how much they are eligible to spend on your site. Through the Affirm app, they can set up an online wallet using a virtual card which will help them get quick approvals, automate payment as well as track payments and balances.

Check out how to integrate Affirm on your eCommerce platform.

Key Features
  • 4 interest-free payments every 2 weeks 
  • Monthly Payments of up to 36 months (10-36% APR)
  • No late fees
  • Maximum spending limit: $17,500
  • Minimum spending limit: $50
  • No fees/interest
  • Customers know much they’re prequalified to spend
  • Pausing the customer's account prevents a debt overburden
  • Special discounts on the app
  • Defaulters are reported to Experian, which can affect your credit rating

3. Sezzle


Sezzle is a pay-over-time financing option that gives interest-free loans through its Sezzle app, website, or online storefronts of participating outlets. You must set up a Sezzle account and have a virtual card to make an online purchase. Like Affirm, it offers pay-in-four and monthly installment options depending on the order value. 

A customer can delay payment for 48 hours, once per order, at no charge. Alternatively, they can reschedule payments up to 3 times if they need to remit funds on time. The first rescheduling is free, but a $5 fee is applicable for the subsequent instances.  

Another unique feature is the company allows customers to upgrade to Sezzle Up, a premium service that helps them to build their credit score. It files monthly credit reports with Transunion, Experian, and Equifax, where a positive report qualifies them for more credit and, consequently, bigger purchasing power. 

Key Features
  • 6 – week repayment period in 4 equal installments 
  • Maximum spending limit for new users: $500
  • Maximum spending limit: $2,500
  • $10 account reactivation fee
  • $5 payment rescheduling fee.
  • Option to upgrade to Sezzle Up
  • Soft credit checks
  • No fees/interest on compliance
  • Allows for payment rescheduling
  • 48-hour grace period for delayed payments
  • On-time payments help build credit ratings through Sezzle Up
  • 5 % fee if you want to reschedule payments
  • The 10% reactivation fee is quite high
  • Customer service is through emails and not phone calls

4. Klarna


Klarna is a Swedish FinTech company that offers post-purchase payment services to shoppers using the eCommerce platform. Set up in 2005, the company is widely regarded as the pioneer of Buy Now, Pay Later services with over 450,000 + retail partners and 147 million customers in 17 countries. It has an estimated 25M customers in the U.S alone. Discover Klarna’s Partner U.S Stores

Klarna has 4 payment options: Pay in 4 installments, Pay in 30, Financing and Pay Now.

Despite which payment option the customer chooses, Klarna will always pay you upfront and in full within 3 business days after the order is shipped. This ensures there is zero credit risk to your business.

Unlike most BNPLs, Klarna doesn't have a preset spending limit. The limit is primarily determined by the order value and how long the customer has been using the service. Each order is determined individually, meaning Klarna can approve and reject some purchases. 

Klarna for business charges merchants 2 service fees per transaction; a fixed $0.30 fee and a variable fee of 0-5.99% depending on the merchant and purchase value. It is a fair price according to many existing businesses in contrast to the 41% and 30% increase in the average order value and conversion rates, respectively, when using this platform.

Key Features
  • Pay in a 4 – 6-week repayment period in 4 equal installments 
  • Pay in 30 – 1 payment after 30 days
  • Monthly Financing – Monthly payments of up to 24 months  (0%-28.99% APR)
  • Maximum spending limit: N/A
  • $7 late fee
  • Service charges: $0.30 fee plus variable fees up to 5.99%
  • No spending limits
  • Soft credit checks
  • Account sign-up is not required
  • 10-day grace period for missing payments
  • Rewards program on the Klarna mobile app 
  • Charges a 7% late fee
  • Positive loan repayments are not reported to the credit bureaus
  • Unavailable to Hawaii and New Mexico residents

5. Splitit


Splitit is a buy now, pay later solution that allows customers to use their existing credit cards to break down their purchases into manageable installments.

They take advantage of no fees or interest on the installments to avoid costly credit card fees while benefitting from the card’s loyalty points and rewards. Splitit’s average order value is $1,000, the highest among BNPLs, making it easy for shoppers to budget and manage their payments comfortably.

Unlike other BNPLs, there is no need for credit checks or filling out applications to determine eligibility. A customer's spending limits depend on whether their credit card has enough available credit to cover the purchase cost. Besides can also set a purchasing limit of up to $65,000 depending on their product line and scale of operations. 

Splitit allows you to receive payments in advance or in line with the customer's repayment plan. If you opt for the latter, you will receive payments as soon as the clients remit their installments. The cost of using Splitit for a merchant is a $1.5 flat fee plus a variable of 1.5%-4% per transaction. The company doesn't capture customer data ensuring security against wire fraud and that you have complete control of your customer's relationship.

Key Features
  • 2-24 monthly installments
  • Maximum spending limit: $65,000 
  • Merchants to own their customer relationships
  • 7-day grace period for missing payments
  • No redirecting or third-party registration
  • No credit checks
  • No data harvesting from customers' details
  • Huge spending limits 
  • You can build your credit score
  • Automatic payment deductions 
  • Only accepts Visa, MasterCard, or Discover payments.
  • May lead to impulse purchases

6. PayPal Pay Later


PayPal Pay Later is an extension service of PayPal that offers a revolving line of credit for consumers to buy from eCommerce businesses. It allows the consumers to break down their purchases into four installments payable every 2 weeks or pay in 6, 12, or 24 monthly installments, which can be a lifesaver for a big investment. The $30-$1,500 or $199 to $10,000 credit is interest-free if you pay it off before the due date, with no hidden fees or penalties for early payments.

You incur no additional costs as a merchant if you accept PayPal as a payment method. Using this payment platform also builds customer trust in your business as it is a recognizable global brand. The platform already has millions of customers, and with more joining daily, it can drive up your sales.

Key Features
  • 6-week repayment period, 4 equal installments 
  • Minimum spending limit: $30 or $199
  • Maximum spending limit: $1,500 or $10,000
  • No interest/APR on loans
  • No penalty fees for late payments
  • Simple customer checkout
  • Globally trusted payment service by merchants and consumers alike
  • Not available in some states, such as Nevada, Missouri, New Mexico, and Wisconsin
  • No option to reschedule the payments 
  • Credit checks required

7. Perpay


Perpay is a fintech company that makes credit available for customers to fund big purchases by splitting their bills and paying over time.

The service is only available for fully employed individuals who can set up automatic direct deposits to settle their payments. It helps customers to avoid the installments that can overdraft their checking accounts.

Perpay + is an additional service that helps your customers build your creditworthiness, provided they clear up your payments on time, costing $2 per month.

There are no late fees for customers who cannot meet payments but won't be able to make any additional purchases while a payment is due. However, customers on Perpay+ risk being reported to credit bureaus.

Key Features
  • Monthly payments of up to 6 months
  • Annual income should be greater than $15,000
  • Direct deposit payments
  • Perpay+ allows you to build credit
  • Soft credit checks
  • No late fees/interest
  • Reduces shopping cart abandonment
  • Suitable for creating a positive credit score
  • Unsuitable for part-time or self-employed individuals
  • Does not accept major credit cards
  • You can only use it to buy items on the Perpay site or app

8. FuturePay

Futurepay buy now pay later


Futurepay provides customers with easy and reliable ways to pay for their purchases from online stores and point-of-sale businesses without a credit card.

They can choose their flexible monthly payments through My Tab, but FuturePay will make an instant payment to your account via ACH. No penalty fees for late payments below $50 but $1.25 for more than $50 for an unpaid balance at the end of the billing cycle.

Compatible with mobile devices, customer can complete their transactions in a few seconds; they only need to input their username and password at the checkout. They can also track their payments which appeals more to the modern-day shopper and significantly boost repeat purchases.

There are no set-up or monthly fees for merchants who sign up to use the FuturePay platform. You will only be charged a 3% fee on every successful order. See all your sales and payment reports in their respective tabs in your account. The company also offers cross-merchant market campaigns, which help businesses attract and grow their customer base.

Key Features
  • Monthly payments
  • No credit card required
  • No fees for < $50 balance
  • $1.25 for every >$50 unpaid balance
  • Secure payments
  • 3% merchant fee per transaction 
  • No credit checks
  • Mobile device compatibility
  • Exclusive offers and updates on shopping events
  • Late fees
  • Not available/ restrictions in many U.S. states

9. Zip


Zip is an Australian company that allows consumers to make purchases and split payments into four equal interest-free installments. It is present in 14 global markets and acquired Quadpay in 2020 to become a significant stakeholder in the U.S. market. Currently, it has 21,900 retailers using Zip for Business and growing as other small businesses join the bandwagon of flexible and seamless online and in-store payment. Sign up to be a Zip Merchant

Zip charges a convenience fee for installments depending on the order value. Here are the costs:

$4 from $35 – $99.99  

$5 from $100 – $199.99

$6 from $200 and above

The fees are divided equally, meaning you'll pay an additional $1, $1.25, and $1.5 for each installment. It is also important to note that the convenience fee is nonrefundable in case of a return. Zip payments are conveniently acceptable from all major cards. 

Zip allows you to reschedule your payments at least 24 hours before your payments are due. Failure to which the company credits your debit or credit account with $5, $7, or $10, depending on your state. The customer can incur further penalties as the account will get overdrawn.

Key Features
  • 6 – week repayment period, 4 equal installments 
  • Maximum spending limit: $1,500
  • Minimum order value: $35
  • $4, $5, and $6 convenience fees
  • $5, $7, and $10 late fee
  • Soft credit checks
  • No fees/interest
  • Offers payment rescheduling 
  • Reminders so that you don’t miss payments
  • No grace period if you miss payments
  • Penalty fees from bank or credit card issuers for overdrafts 
  • An inconsistent loan approval process

10. Shop Pay by Shopify 

shopify shop pay

Shopify is one of the largest online platforms, with over 100 million customers. As the market shifted towards BNPLs, Shopify partnered with Affirm to roll out their own accelerated checkout program, Shop Pay . Launched in 2021, it has one of the most advanced security features of any BNPLs tools (PCI-compliant), which has seen its popularity amongst merchants and shoppers steadily increase.

It helps customers split their purchases into 4 interest-free payments for orders between $50 – $1,000 or monthly installments for orders $150 – $17,500. The APR for the monthly payment ranges from 10-30%. While there are no charges if a customer misses an installment, they may be restricted or banned from this service. 

You receive full payments upfront, with Shop Pay charging a meager 5-6% service fee, ensuring your business operations never come to a halt. Besides, conveniently track all your sales, business performance, and payments under the Admin's page. Shop Pay supports all major credit cards except Capital One and has over 20 language options. Sign up to explore more on Shop Pay services.

Key Features
  • 6 – week repayment period in 4 equal installments 
  • Monthly payments of up to 12 months
  • Maximum spending limit: $1000, $17,500
  • Minimum order value: $50, $150
  • Service fees: 5-6% per transaction
  • No late fees/interest
  • Fewer abandoned carts
  • 100 million plus customers
  • Secure transactions
  • Post-purchase offers to entice return purchases
  • Subject to an eligibility check, and may not be available in all states

Things To Consider Before Choosing A Buy Now, Pay Later Tool

If you’re looking to partner with a reliable BNPL provider, here are five things to consider before deciding which provider is best for your needs:

Seamless Payments 

The interface should make things easy for the customer to select their financing option and complete the checkout process as quickly as possible.

Rerouting and pop-ups can lead to customers abandoning the shopping cart midway through the transaction. Seamless payment reduces friction in the marketplace, increasing conversion rates and repeat purchases.

Interest-Free Payments

Flexible payments with no interest are more attractive to online shoppers. It means they will pay for the product's original value despite spreading it across weeks or months.

Besides, there is no impact on their credit history if they pay their installment earlier or on time. This is unlike credit card facilities that charge interest whether you repay before maturity.

Minimum Purchase Amount

A minimum purchase amount is the smallest transaction value a customer can spend to qualify for a particular BNPL service.

Ideally, the higher the MPA offered, the better since customers can spend more on your platform.

However, the amount should match the value of the products you are selling to remain attractive to prospective clients.

Know Your Average Order Value

Your AOV is the average dollar amount spent per purchase. It helps understand your customer behavior which will be helpful in product pricing and the overall marketing strategy.

If you have a low or declining AOV, it may be time to integrate BNPLs into your business to maximize your revenue and conversion rates with increased site traffic.

Credit Check Requirements

Will the provider do a soft or hard check on your customers? These background checks focus on the customer’s ability to manage and repay their credit obligations.

Soft checks may be more suitable as the BNPL provider will approve a more expansive customer pool to complete their purchases. Hard checks cut off most young people who coincidentally make the bulk of online purchases.

Final Thoughts

Buy now, pay later is one great strategy for growing your online business. It removes price as a barrier for shopping, splitting customer purchases into budget-friendly payments.

As a result, it drives your sales by boosting your average order value and conversion rates and encouraging return purchases.

Partnering with a reliable BNPL service provider allows you to tap into their customer base, which could propel your brand and increase your engagement.

Do you use Buy Now, Pay Later services? Let us know how it is working out for and read more about eCommerce solutions for small businesses on our blog.

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