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Buy Now, Pay Later (BNPL) For EComm Merchants | 2022 Guide


“Hey, thanks for the products, I’ll pay you back later.”

Said 56% of Americans at some point in their shopping experience. 

That’s good though, right? Customers are finally treating eCommerce brands like friends. Buy now, pay later is one of the most popular eCommerce trends in 2022, and even Amazon joined in on the hype.

Still, many eCommerce brands remain wary, especially because of its softer credit checks, uncertain outcomes, and if it’s overhyped. Is introducing another payment option really going to boost your AOV and conversions while enhancing the customer experience? 

What is buy now, pay later (BNPL)?

Buy now, pay later (BNPL) is a financing option that lets customers purchase products by placing a down payment and paying the remainder later in installments. Installments are typically 4 payments due every other 2 weeks with the first payment being due on the date of purchase. 

Unlike credit cards, BNPL payments are typically interest-free and do not directly affect your credit score. BNPL companies don’t charge customers. Instead, they take a percentage of the revenue from you, the merchant, on each purchase. 

How BNPL works for eCommerce merchants

BNPL options may vary from vendor to vendor. eCommerce brands set required down payment percentages, and payback windows, based on their preferences. 

The general process for BNPL is:

  • A customer orders from your store and chooses “buy now, pay later” at checkout.
  • Your BNPL system approves or rejects their request. If the customer is approved, they’ll need to pay the required down payment.  
  • The order fulfillment process begins as with any other order, and the customer receives the item after the usual delivery time. They’ll continue to pay you back in installments over the next few weeks (or months).

What if a customer misses a payment?

The benefit of BNPL for eCommerce brands is that most of the BNPL platforms guarantee you’ll get the payment. So even if a customer misses a payment, you’ll still get paid.

BNPL vs. credit cards for merchants

Although BNPL options and credit cards are both micro-loans for consumers, merchants need to understand how they compare. There are a few notable differences between them:

  • Buy now, pay later companies typically charge a higher fee per order than credit cards: Credit cards typically charge ~2%-3% for vendors, while BNPL platforms can charge up to 6%-7%.
  • eCommerce brands typically offer a BNPL option on all their products. However, there are typically upper and lower bounds (based on the total cart value) vendors are willing to support.

BNPL companies currently manage the involved credit risks, including chargebacks and frauds. They’re also lighter on credit checks, but this may or may not change in the future. Providers may maintain softer checks to differentiate themselves from credit card companies. 

How BNPL can grow your eCommerce brand

BNPL has become popular because of the convenience for customers and the psychology of the solution: from the customer’s point of view, it may seem far more palatable to pay for an expensive item in smaller parts. 

But how does this all translate into gains for your eCommerce brand?

Better conversion rates

BNPL options don’t just increase average order values, but help secure conversions, too. Research has credited up to 35% increases in checkout conversions to the introduction of buy now, pay later options.

Given that cart abandonment rates are nearly 70% on average, exploring new ways to increase conversions and reduce cart abandonment is increasingly vital. 

Higher average order value (AOV)

Increasing your average order value (AOV) is crucial to drive revenue and maximize your customers’ lifetime value. But efforts to increase AOV are often nuanced. eCommerce brands aim to optimize their pricing structures and make personalized recommendations to encourage more purchases or more expensive purchases per order. 

However, brands can leverage BNPL to see more direct growth in average order value. 

The payment option can increase your AOV by up to 45%, as the financing options reduces checkout friction and makes higher ticket items more accessible to consumers.

Increased customer experience

Customer experience is one of the most crucial eCommerce brand differentiators, and buy now, pay later helps you increase customer convenience (therefore, it improves customer experience). 

Diversifying payment options and reducing friction lets eCommerce brands serve customers better, and BNPL can launch a brand toward achieving these goals. 

How to offer BNPL for your eCommerce brand

Buy now, pay later helps eCommerce brands serve customers better, increase profitability, and stay competitive. So if you’re considering implementing BNPL, here’s how you can introduce it to your customers:

BNPL for Shopify stores

If your brand is on Shopify, you can leverage Shopify Pay installments to offer BNPL. Shopify Pay installments is Shopify’s integrated BNPL option, powered by Affirm

It allows customers to pay you in four equal installments with zero interest, and their credit scores remain unaffected. 

Alternatively, you can use platforms like Klarna, Zip, and Afterpay to seamlessly provide buy now, pay later options at your Shopify store checkout. 

BNPL comparison

Not sure which BNPL platform is best for you? Check out the table below to see how popular BNPL compare:

BNPL for Amazon merchants

Amazon isn’t one to lag behind the competition. As expected, the eCommerce giant embraced buy now, pay later in mid-2021. Like Shopify, Amazon partnered with Affirm to introduce BNPL. 

Customers can choose the option at checkout for total purchases of $50 or more, splitting the cost into four installments paid over a fixed period of time. 

BNPL in 2022

BNPL is exploding, and the positive effects on AOV and CVR are compelling enough for brands to implement it without thinking.

Based on what we see right now, the future of buy now, pay later isn’t guaranteed, though this may change as we see it evolve over time. At the moment, it’s not quite the wild west, but it’s still early days.

We see a couple potential roadbumps for the world of BNPL: providers may face regulation, and customers are missing BNPL payments

Some consumers shouldn’t qualify for payments in installments, but a lack of hard credit checks allows them to get approved for BNPL payments. Both eCommerce brands and BNPL companies are navigating delicate territory, but data will ultimately be what illuminates the path forward and adds more certainty to current speculation. 

The profitability of BNPL isn’t in question, but the sustainability is. Can providers survive without harder credit checks and higher numbers of missed payments? We’ll have to see.


In your quest to deliver the best customer experience, buy now, pay later is a payment option you should offer to your customer base. 

At this stage, eCommerce brands benefit greatly by offering BNPL. The payment option has the potential to boost your checkout conversions, increase customer retention, and drive up your average order value.

But when partnering with buy now, pay later companies, be sure to check their policies, and keep yourself in the loop about any developments. You should keep the following in mind when considering a BNPL platform:

  • How much am I going to pay in fees?
  • What are the lower and upper limits for BNPL orders?
  • Are the higher fees (compared to credit cards) going to adversely affect our profits based on our goals?
  • What kinds of reports are available to track performance, payments, and profits?
  • Does the BNPL platform integrate with our reporting tools?

Special thanks to our friends at Daasity for their insights on this topic.
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