Buy Now, Pay Later: How can it work for my business?

Buy Now, Pay Later, or BNPL for short, is a form of financing that lets customers pay for something over time. It generally can be categorized into two types: invoicing and installments.

Invoicing

The customer checks out without paying anything and needs to repay the full amount in 14-30 days. This is a zero-interest option and most popular in Europe.

Installments

The customer repays the balance in bi-weekly or monthly payments. For some BNPL solutions, a deposit is collected at the time of purchase. This is most popular in North America.

Very simply, the customer makes a payment via a buy now, pay later method. The BNPL provider pays the merchant the full purchase amount. The customer then repays the BNPL provider either the full amount or in installments.

On a more detailed level, a repayment works differently depending on if it’s classed as a credit loan or a deferred payable. With a credit loan, BNPL is accounted for as a customer loan. With a deferred payment, the merchant buys an “I owe you” (IOU) from the BNPL provider. This difference can affect the repayment terms for the customer and the contracting terms for the merchant.

BNPL providers have different terms and conditions on certain topics, including:

• Repayment periods: Customers either need to make the repayment in full at the end of the month (like credit cards), or pay in installments on a weekly, biweekly, or monthly basis.

• Late fees: There are a range of associated fees when a customer doesn’t pay on time, such as interest or late fees, monthly fees, or account reopening fees.

• Payment channels and types: They cater to different channels and payment types, like in-person, online, and recurring payments.

• Marketing requirements: Some expect advertisements on the merchant’s website, like promo banners, and marketing budget allocation.

Offering a Buy Now, Pay Later solution can be advantageous, but it can work better for some businesses than others. Pinpointing exactly where a BNPL solution can help your business can ensure you see the benefits you expect. Below you can see how well your goal lines up with what a BNPL solution can offer.

If you have the resources available, and are unsure if a BNPL solution will benefit your business, test it out. A test run with an implemented BNPL solution can help to show whether it has the desired impact with your customers and resonates well with your audience. With Adyen, you can quickly turn on and off and test different payment methods through one integration.

The next step, once you’ve decided to implement a BNPL solution, is to pick one that fits best with your business.

BNPL solutions have different settlement delays and can impact different performance metrics like conversion rates, average transaction value (ATV), and authorization rates. Adding new payment methods can also cannibalize existing ones. It's a good idea to monitor these metrics when you go live with a BNPL solution to understand the impact.

To give you an idea of the solutions out there, here are the most popular buy now, pay later companies globally:

Affirm

Affirm partners with over 6,000 retailers in the US across categories like apparel and accessories, beauty, home and lifestyle, and electronics. They offer flexible financing programs for businesses of all sizes, from mass retailers to local shops.

Afterpay & Clearpay

Afterpay (Clearpay in some regions) is available in Australia, New Zealand, the US, Canada, the UK, France, Italy, and Spain. They offer shoppers the option to pay in four interest-free installments and promise high authorization rates.

Atome

* The ATV maximum for Atome varies based on the market and card type. Merchants can request for higher transaction limits, subject to Atome approval.

Atome is available in Singapore and Malaysia with Adyen, and expected to expand into more countries soon. It supports both e-commerce and in-person (dynamic QR) payments. Merchants are settled in full upfront, while shoppers pay 0% interest installments.

Klarna

* The ATV maximum for Klarna varies based on the market.

Klarna is one of the world’s largest Buy Now, Pay Later providers with strong brand recognition in the EU and growing presence in the US and APAC. Boasting over 140 million users, Klarna accepts both one-off and recurring payments.

Zip

Zip is one of the main 'Buy Now, Pay Later' services across countries including Australia, New Zealand, the United States, and Canada. They provide interest-free purchases both online and in-person, as well as an open-loop virtual credit card solution in Australia.

Buy Now, Pay Later in Singapore

Adyen provides seamless integration with BNPL solutions like GrabPay and Atome in Singapore.

GrabPay: Leveraging the popularity of Grab in Southeast Asia, GrabPay offers a BNPL option that can be integrated into your payment system via Adyen. This allows businesses to cater to a large customer base familiar with the Grab ecosystem.

Atome: Adyen’s integration with Atome supports both ecommerce and in-person payments, allowing businesses to offer flexible payment options to customers in Singapore. Atome’s 0% interest installments can help increase conversion rates and average order values.

With Adyen, you can manage these BNPL options through a single integration, simplifying the process and ensuring a smooth implementation. 

With a Buy Now, Pay Later solution, the payment experience can become more seamless and draw new audiences. The BNPL market is still evolving with new solutions made on a country to country basis.

With a multitude of options available, it can be difficult to navigate the BNPL stage. Check out our payment method explorer to easily compare and choose a Buy Now, Pay Later solution fit for your business.

Determining whether buy now, pay later is right for your business depends on your specific strategic goals.  

To evaluate if BNPL aligns with your business goals, you can compare your core business objectives with the actual performance outcomes of BNPL integration. 

Although BNPL transaction fees can be higher than standard card processing, the overall increase in average order value (AOV) and checkout conversion typically outweighs these additional costs.

* Note: While BNPL processing fees can be higher than standard card processing, the resulting boost in AOV and conversion rate generally outweighs the higher transaction cost. If you have the operational resources but want to be sure of the overall business impact, you can run a structured trial.

• Use a flexible payment platform: Partner with a payment processor that allows you to turn payment methods on and off instantly without rewriting code.

• A/B test your checkout: Implement BNPL for a subset of transactions or regions to directly measure customer adoption, average transaction value, and any potential cannibalization of lower-cost payment methods.

Testing payment methods in real-time ensures your business can make data-driven checkout decisions backed by concrete shopper behavior.

The most popular buy now, pay later solutions include global providers like Affirm, Afterpay, Atome, Klarna, and Zip, each catering to different regional markets and transaction values. 

Choosing the right partner depends heavily on your primary customer base, average order size, and regional goals.

To help you compare the primary solutions available in the global payments market, here is a breakdown of the leading BNPL networks:

Affirm

Affirm partners with thousands of retailers in the United States, offering highly flexible financing options across high-value retail categories like apparel, home goods, and electronics.

Afterpay and Clearpay

 Originally founded in Australia, Afterpay operates across Oceania and North America, and is known as Clearpay in Europe. It is highly valued for its interest-free consumer model and strong authorization rates.

Atome

Atome is a dominant BNPL player in Singapore and Malaysia, supporting both seamless digital checkouts and in-store point-of-sale transactions via dynamic QR codes.

Klarna

With over 140 million active global users, Klarna is one of the world's largest payment providers with exceptional brand recognition across Europe and North America.

Zip

Zip is a leading BNPL provider operating in Australia, New Zealand, the US, and Canada, offering interest-free shopping options across both physical and digital retail channels.

Global brands have successfully integrated BNPL to drive customer acquisition, increase order size, and streamline their global checkout operations. 

Here are some examples:

City Beach

Australian fashion retailer City Beach partnered with Adyen to consolidate fragmented payment systems into a single unified commerce platform. By leveraging Adyen, they easily introduced Buy Now, Pay Later options like Afterpay, improved fraud prevention through RevenueProtect with machine learning, and streamlined refund and chargeback management.

Kendra Scott

Fashion brand Kendra Scott modernized its payment ecosystem by replacing separate in-store and ecommerce systems with Adyen’s single platform. This migration provided real-time transaction insights, reduced PCI compliance workload by 70%, and enabled rapid deployment of alternative payment methods such as BNPL. 

ROLLER

Attractions software platform ROLLER launched ROLLER Payments using Adyen for Platforms to embed payments into their guest experience. The integration expanded available payment options to 38 local and global methods (including BNPL), boosted authorization rates from 87% to 94.5%, and reduced onboarding times for venues from months to weeks.

Offering BNPL with Adyen allows you to integrate, test, and scale multiple BNPL options globally through a single, unified payment platform. 

Instead of managing complex integrations, separate contracts, and disconnected settlements for every provider, Adyen handles the operational heavy lifting for you.

When you manage your payment strategy through Adyen's financial technology platform, your business gets access to several operational advantages:

• Single integration: Turn on or off popular BNPL options like Klarna, Affirm, Afterpay, Atome, and Zip with a simple toggle in your Adyen Customer Area without writing any new code.

• Unified reporting and reconciliation: View and analyze all transaction data in one centralized dashboard, and benefit from unified settlements across card payments and alternative payment methods.

• Advanced risk management: Leverage Adyen's built-in fraud prevention tools while the BNPL providers absorb the full risk of consumer defaults.

• Global scalability: Seamlessly offer local BNPL methods in Europe, North America, and Asia-Pacific to match regional shopping preferences.

Are you ready to optimize your checkout experience and accelerate your business growth? 

Contact our sales team today to discover how Adyen can help you implement a localized BNPL strategy.

• Diverse models: BNPL consists of invoicing (deferred 14–30 days, popular in Europe) and installments (split bi-weekly or monthly payments, popular in North America).

• Revenue acceleration: Offering BNPL directly boosts average transaction values and customer acquisition. It doesn’t necessarily lower transaction costs or raise authorization rates.

• No merchant credit risk: BNPL providers assume all credit and default risks, settling payments upfront with the merchant and handling customer collections.

• Agile testing: Unified payment platforms like Adyen allow merchants to easily test different BNPL methods to gauge consumer adoption before a full rollout.

• Global optimization: Leading brands like Lorna Jane, Superdry, and Richemont successfully utilize BNPL to eliminate checkout friction and increase conversions.