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How to Start Your Buy Now Pay Later Business and Get More Customers Today


Buy now, pay later (BNPL) is an e-commerce shopping option with convenience and personalization as key advantages. And this is not just a trend for those whose business is growing on the credit industry “plantations”, but a prerequisite for remaining competitive, and therefore successful. In order not to be unfounded, let us take a look at the figures. BNPL is a $100 billion global industry, as stated by CNBC. And Worldpay predicts a doubling of this figure to 4.2% by 2024.

The BNPL market includes such retail giants as Apple or PayPal, which already offer split payments in more than 600,000 physical stores. The scope with which the BNPL service is being developed and accepted indicates the growth of consumer interest.


How Buy Now Pay Later Business Works

The BNPL model is a type of short-term financing. Unlike installment loans, it allows consumers to split the cost of an item into interest-free payments.

BNPL firms generally earn interest from trades. For example, if a shopper completes a $1,000 iPhone purchase by splitting the payment into 5 payments of $200 per month, a merchant might receive $950 and the provider gets $50. The commission for funding services commonly ranges from 1.5% to 7% of a deal. In addition, BNPL firms may profit from a late payment fee that will be charged to a consumer's account if debt or other financial obligation is not paid when due.

There are three parties involved in BNPL: a financial service provider, a merchant, and a shopper. The shopper initiates the purchase of an item, selects the BNPL option, and pays the first installment. The subsequent installments are debited from the specified account or bank card, according to the selected repayment schedule.

The merchant right away supplies the customer with the items bought, while the BNPL firm pays the merchant the entire order sum, excluding the acquisition fee.

Benefits of BNPL for Merchants and Consumers

According to research by The Ascent, almost 40% of Americans aged 18 to 54 have taken advantage of the buy now, pay later ecommerce, and are satisfied. Let us find out why the pay-after service attracts both merchants and consumers.

For Merchants

Higher average order cost and better conversion rate

According to statistics, utilizing the ecommerce buy now, pay later model allows retailers to increase the average check by 60% and conversion by 20%.

No credit or fraud risk

BNPL firms pay retailers the total transaction amount, taking all the threats associated with the client's refusal to pay the remaining amount. Whereas the merchants risk nothing. 

Advantages over competitors

Now more than half of e-commerce stores are implementing the BNPL installments option. Therefore, in order to be at the forefront of the race for the attention of shoppers, you need to have what they want so badly: a simple way to quickly get what they want, but cannot afford.

For Consumers 

Possibility of purchasing big-ticket items

The biggest reason people use the buy now, pay later model in installments while shopping is to be able to get a more expensive item that they can't pay for in one go.

No interest

The BNPL payment method does not involve any interest rates, annual fees, confusing terms of service, and other complexities inherent in installment loans. Of course, in the event that payments are made on time.

Effortless Shopping

By choosing BNPL, the consumer says yes to the best installment shopping experience, without having to go through a credit check and deal with complex credit conditions. The product is bought with a few clicks and paid for in any convenient way.

Industries that Can Benefit from Launching a BNPL Service

Any business related to finance, products, and services can benefit from BNPL in one way or another. We will take a look at three industries that have pioneered the global adoption of the service in their business and have seen significant benefits.


As BNPL continues to evolve and expand, banks should seriously consider using this option in their business. This will make them more competitive and keep Gen Z and millennials, who are best known for using microcredit for ecommerce shopping, among their clients.

Through cooperation with FinTech solutions that provide innovative products for the BNPL banks will be able to make the most of their available capital and benefit from integration with well-known brands, increasing their clientele.

Imagine what it would mean for a bank to integrate with Apple, which is just starting to enter the BNLP lending market by launching its own Apple Pay Later solution.


While more stores are moving to the buy now, pay later model, some are still hesitant to share their business with a third party. They believe that using platforms like Klarna, they will have to submit to the framework and rules of the BNPL service supplier. They are right in a way. However, this is not a reason to abandon the idea, but to look for another way, for example, implementing your own solutions using some kind of ready-made BNPL software. 

This option eliminates the need to report to a third party, because the retailer becomes the full owner of the BNPL platform, which, moreover, is designed specifically for the needs of his/her business.

Thus, the use of own ready-made BNPL software guarantees the retail business owner three main benefits:

  • loyal customers who are grateful to be able to finance their purchases and have a better shopping experience;

  • unique branded software that meets the needs and interests of the business;

  • 20% increase in revenue (without deducting fees to the bank financing the purchases).


Lending companies

Since the businesses of lending companies are very similar to banks, they both benefit similarly from the adoption of BNPL. The only thing worth adding here is that the income from the usual installment loans is almost twice as much as the income from the BNPL, due to the large difference in percentages. 

However, this does not mean that for landers the game is not worth the candle. On the contrary, there are a lot of people who want to use the BNPL service. In addition, low-cost purchases happen more frequently than buying real estate, for example, which is usually purchased on credit. 

Thus, taking into account the volumes and frequency, the revenue of landers can turn out to be worthy. They will make a profit due to the greater number of applications for this type of loan.

How to Choose Your BNPL Software

Those who intend to introduce BNPL into their business will need the appropriate solution. There are a large number of platforms on the market for the implementation of such a financial service, including Klarna, PayPal Credit, and AfterPay. These are very popular off-the-shelf solutions that are integrated into e-commerce sites and are used by many merchants. For example, there are more than 400k of them on Klarna alone. And to use their product, you need to get their approval after they learn more about your business.

The second option is to use the end-to-end BNPL software platforms as they have some advantages that off-the-shelf platforms lack. First, such BNPL platforms can be customized and branded. So, instead of “Klarna”, for example, there will be a logo and corporate identity of your company. And instead of having to adapt to ready-made rigid software, you can customize its functions for yourself.

Secondly, this is not just a BNPL service, but a multi-tool for issuing a loan, with a set of functions such as precise KYC, scoring modules, and a decision engine. One of such platforms is Neofin. Since the software has no code, it is very simple and can be easily integrated into the existing lending or payment platform. 

For the convenience of the consumer, the Neofin platform has the functions of QR-code for applying and agreeing on the payment in BNPL, electronic signing of the contract, and a cloud-based terminal for offline shopping through QR-code scanning.

Are You Ready?

BNPL is an effective component of commerce that allows consumers to purchase goods in interest-free installments, merchants, and banking institutions to increase revenue and generate new leads without extra costs. 

And most importantly, with end-to-end software, using buy now pay later for business is easier than ever. Start a free trial at Neofin and launch your BNPL business within 1 day.

Neofin Official
Neofin Official
Август 15, 2022
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