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The Next Big Thing in Payments: Buy Now, Pay Later

The Next Big Thing in Payments: Buy Now, Pay Later
30 Mar 2021

The past few years have seen a steady increase in the use of Buy Now, Pay Later options by online shoppers, and the coronavirus epidemic has made BNPL more popular than ever. Buy Now, Pay Later (BNPL) is exactly what it sounds like: it offers online consumers the chance to buy products and pay for them later in instalments, which are sometimes interest-free. According to a recent study, 1 out of 3 Americans has used BNPL options when shopping online.

How Does BNPL Work?

BNPL options are offered by various payment providers, including AfterPay, Klarna, and PayPal. Websites that integrate BNPL give shoppers an additional way to pay for goods. Each company has its own repayment terms. Some charge interest but offer interest-free periods, so if the consumer pays back the full amount before the period ends, they avoid paying interest. When interest is applied, it’s usually fairly high.

Advantages of BNPL for Online Merchants

It’s easy to understand why consumers like BNPL. It allows them to make large purchases without paying all at once, and it doesn’t require a hard credit check like a credit card. When COVID-19 brought with its financial setbacks for many, BNPL became a way for consumers to buy things that they couldn’t afford at the moment. What about online merchants? What are the advantages of BNPL for them?

Increased sales

The minute you offer more payment options, you increase your potential buyer pool, which can subsequently increase sales. BNPL is especially attractive to the millennials and Gen Z, who tend to be warier of credit card companies and have less cash up-front. By offering a payment method that allows payment instalments, it can increase your bottom line.

Builds customer loyalty

One of the issues with online shopping is that consumers don’t actually see the product until they’ve paid for it and received it. If they’re not happy, they can return it and then wait for the refund.

With BNPL, consumers can get the product and return it if they don’t like it without going through the technical and annoying process of requesting a refund. BNPL can push off the first payment until the consumer receives the product and sees that they’re satisfied with it. If not, they can return the product and not have to worry about waiting to receive a refund.

Online merchants that offer free returns may take a slight short-term hit, but at the same time they can end up gaining loyal customers that are more valuable than the cost of free returns.

Smoother checkout process reduced cart abandonment rates

Cart abandonment is when consumers load up their online shopping carts and never follow through with a purchase, and it’s a known challenge in the world of e-commerce. One of the main reasons that consumers abandon their carts is that the checkout process takes too long.

With BNPL, the checkout process is quick and easy. Since BNPL options are offered by a variety of payment providers, consumers just need to sign into their accounts without inputting any financial details. This makes the checkout process smoother and reduces cart abandonment rates.

Bottom Line

BNPL is taking online shopping by storm, and eCommerce stores that want to stay competitive should certainly consider offering at least one option. It may seem like a headache to offer yet another payment solution, but using a payment orchestration platform like BridgerPay can minimize the hassle. BridgerPay integrates with several BNPL options, including AfterPay and Klarna, as well as more traditional payment methods like PayPal and major credit cards.

While BNPL makes the checkout process easier and more pleasant for consumers, using one platform to manage all your payment solutions makes the checkout process better for online merchants.


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BridgerPay is not a PSP, or an acquiring service, and we do not provide any processing merchant accounts. Bridger is a PaaS (payment-as-a-service) company that allows businesses to utilise one API to consume all payments from any method or provider that is connected within BridgerPay’s ecosystem.