Seven Reasons Your eCommerce Store Should Implement Buy Now, Pay Later Options

Category: RECENT
June 9th 2021
6:28:20 pm

Buy now, pay later provides substantial benefits to consumers, enabling them to pay for an item in installments as they might with a credit card. That said, many buy now, pay later benefits for eCommerce merchants exist as well.

We’ll get to those perks in just a minute.

over the last several years. However, with the advent of the COVID-19 scare and the financial ramifications it has had for consumers and companies alike, buy now, pay later is likely to become a mainstream eCommerce installment over the next several years.

As a result of the increased adoption, now is the perfect time to help retailers understand buy now, pay later benefits for eCommerce, as this feature is likely to find its way onto many merchants’ stores.

With that said, let’s take a look at how buy now, pay later services work and the benefits of implementing this type of payment option, as well as some platform options that sellers might opt to leverage.

How Buy Now, Pay Later Works

In a nutshell, buy now, pay later is essentially like layaway, but better.

In the online retail world, buy now, pay later solutions are integrated into, thereby allowing customers to pay for a purchase in various installments. While the terms of the agreement are likely to vary, consumers get their products immediately, ultimately paying the total cost (and then some) over time.

While there are fees related to using buy now, pay later options, for many, this can still be a money-saving alternative to using credit cards, which often come with significant APRs.

The fact is that buy now, pay later platforms wield a variety of advantages over credit cards (which often result in fees, penalties and the like), such as:

  • Highlighting interest charges upfront
  • Various payment plan options (depending on the solution)
  • No interest if paid within six months to one year of purchase (again, depending on the platform utilized)

This is all fantastic news for retailers as one of the most significant buy now, pay later benefits for eCommerce is that it is likely to help reduce cart abandonment rates.

The truth is that this could be massive for some merchants considering that show that:

“A single year cart abandonment is responsible for $4.6 trillion in lost eCommerce sales.”

On that note, let’s go ahead and dive straight into the many buy now, pay later benefits for eCommerce that exist.

Seven Buy Now, Pay Later Benefits for eCommerce

As it stands, there is a significant number of benefits that retailers can gain from implementing buy now, pay later solutions.

Some of the most prominent of the bunch include:

1. Merchants Get Paid Upfront

A sizable benefit of implementing a buy now, pay later solution is that retailers get paid upfront and in full. This means that the payment provider takes on all of the risks.

Given that consumers benefit from such systems and retailers incur no risks, this is a meaningful buy now, pay later benefit for eCommerce merchants.

2. Generate More Conversions

The truth is that some people are strapped financially as of now. Therefore, they are less likely to make purchases that exceed a specific dollar amount.

However, by supplying buy now, pay later solutions, consumers can pay for the items that they need and want in multiple payments, thereby making them more likely to convert.

As a result, implementing such solutions is likely to help retailers for their stores.

Do bear in mind that this assertion is not merely speculative. When looking at, Afterpay CEO Nick Molnar stated:

“Retailers tell us that average order values increase because customers can purchase a higher quality item or purchase the shoes that match the dress and pay it off over a short period of time. Conversion rates increase too — our research shows that there is a 20–30 percent increase in customer conversion rates.”

As Molnar points out, the use of buy now, pay later on eCommerce storefronts tends to increase conversions and average order values, which leads us to our next point.

3. Higher Average Order Values

There exists a considerable body of research showing that than they will if they use cash. The same type of dynamic holds true for buy now, pay later features.

What this ultimately means is that one of the buy now, pay later benefits for eCommerce is that retailers will likely achieve higher average order values, as well as.

4. Appeal to a Larger Audience

Merchants who offer buy now, pay later options are, in part, aiming to attract shoppers who may not visit their store otherwise.

The reality is that there are millions of consumers who utilize buy now, pay later solutions, many of whom are explicitly seeking sellers who offer this type of payment option.

Therefore, merchants who implement this feature are effectively appealing to a larger audience than if they did not offer buy now, pay later on their site.

5. Consumers Appreciate Choices

When speaking to, one of the key factors is featuring a myriad of payment options.

The fact is that people like having choices. Even if customers opt to utilize one of the lump sum payment options, shoppers like to know that they have alternatives available to them.

By offering multiple payment options, including those of the buy now, pay later variety, retailers are signaling to consumers that they want to make it as easy as possible for them to complete their purchase.

The bottom line here is that the goodwill generated by providing such options can only be a good thing for a business and can even result in, positive word-of-mouth recommendations, increased customer loyalty and the like.

6. More Repeat Business

While it can indeed sometimes be challenging to, offering customers buy now, pay later options is certainly one way to achieve that aim.

As is detailed in a 2020, the implementation of a buy now, pay later feature to Shopify sites resulted in a “20 percent increase in purchase frequency for customers shopping with Klarna Pay in 30 days.”

7. Reduced Cart Abandonment

As was touched upon earlier, one of the most significant buy now, pay later benefits for eCommerce retailers is that this feature can help to.

However, in order to understand why buy now, pay later features would have such an impact, it is first necessary to understand why consumers abandon their carts in the first place.

According to, some of the top reasons consumer ditch their orders include:

  • Extra costs too high
  • Couldn’t calculate total order cost upfront
  • Not enough payment methods

Through the implementation of buy now, pay later solutions, retailers can effectively solve these three issues. As far as extra costs go, the overall lower price tag is likely to mitigate this complaint.

Where calculating costs is concerned, many of the buy now, pay later solutions do enable consumers to see exactly what they would pay, thereby providing a more favorable shopping experience and reducing cart abandonment.

Finally, the gripe about not enough payment options is self-explanatory.

While this feature won’t completely remedy the problem of abandoned carts, buy now, pay later options can go a long way in reducing such rates.

With these buy now, pay later benefits for eCommerce outlined, let’s go ahead and take a look at the platform options available to merchants.

Top Buy Now, Pay Later Solutions

The truth is that there are a lot of great buy now, pay later options on the market. As the solution becomes increasingly popular, even more platforms are likely to emerge.

That said, some of the best buy now, pay later platforms available to date include:

Shop Pay Installments by Shopify

While this solution is exclusive to Shopify, there are well over one million Shopify merchants online, making this a noteworthy inclusion.

, which rolled out in 2020, is the platform’s proprietary four bi-weekly interest-free payment plan option.

While this is exclusive to Shopify, it is worth noting that (another buy now, pay later solution provider) to power the feature.

As of this writing, the feature is still in early access, which means that merchants must join a waitlist to access the feature.

In order to be eligible to utilize the feature, merchants must be based in the United States, sell in U.S. dollars and have Shopify Payments and Shop Pay enabled.

Additionally, for orders to qualify, they must be between $50 and $1,000, those figures being inclusive of shipping and taxes.

Moreover, as far as Shopify buy now, pay later benefits for eCommerce retailers is concerned, as:

“One out of four merchants observed a 50 percent higher average order volume with Shop Pay Installments… Shop Pay Installments [also] offers a 30 percent faster checkout experience to return installments users.”


, the buy now, pay later provider that powers Shopify’s solution, is also leveraged by massive retailers like Walmart, Adidas, Delta Airlines and other household names.

Using Affirm, customers can choose payment plans that range from three to 36 months, with interest rates starting at 10 percent and topping out at 30 percent.

Additionally, Affirm does charge a two to three percent transaction fee to merchants.

Affirm is easy to integrate into a seller’s checkout process and does not slow down the site’s checkout flow.

All that said, it is worth noting that Affirm does run a soft credit check on customers prior to approval, which means that if their credit is not so great, they could be looking at a 30 percent interest rate.

In all honesty, rates that high could end up driving away a certain percentage of customers.


is another one of the top dogs in the flexible payment space.

The company, which added to its rosters, breaks down purchases into four interest-free payments for shoppers while paying merchants upfront. If consumers miss a payment, they are charged a $7 fee and prevents them from using the service until accounts are settled.

While Klarna does offer three different payment options, not all are available to every retailer.

Similar to Affirm, Klarna’s monthly financing can range from six to 36 months and comes with an annual 19.99 percent interest rate. That said, if consumers pay off their balance within six months, no interest will be charged.

As far as merchant fees are concerned, Klarna maxes out at $0.30, in addition to a 5.99 percent transaction fee.


is an Australian-based buy now, pay later service provider that also offers consumers four-installment interest-free payment plans.

Much like Klarna, Afterpay charges merchants $0.30 per transaction, plus a two to three percent commission. Additionally, those who miss a payment will be charged an $8 fee and cannot use the service until they are square.

Setting the service apart from Affirm, Afterpay does not run a credit check on consumers. Moreover, Afterpay splits installments up into equal, bi-weekly payments, thereby giving consumers a predictable payment schedule.

That said, not all purchases will be approved with Afterpay. For instance, if a shopper has a rocky past with the company (missing payments and the like), they could end up getting cut off and unable to complete their purchases using the service. As a result, this could result in a few more abandoned carts than usual.


is another prominent buy now, pay later solution that is quite popular with younger consumers. Therefore, brands that are busy might want to consider this option.

Much like the previously mentioned options, Sezzle allows consumers to procure their products immediately, typically paying 25 percent of the order upfront as a “down payment.” From there, shoppers pay the remaining amount in four interest-free payments over the six weeks that follow the purchase. Again, retailers receive their money immediately.

However, unlike the previously mentioned platforms, Sezzle does allow customers to reschedule their payment once, free of charge. That said, if payments are missed, Sezzle will charge the shopper a $10 late fee.

As far as merchant fees are concerned, Sezzle charges the standard $0.30, plus an additional six percent, which is slightly higher than the aforementioned solutions.

Final Thoughts

While buy now, pay later isn’t exactly a new concept, it is one that is rapidly gaining popularity online. The plain fact of the matter is that, as far as buy now, pay later benefits for eCommerce are concerned, there are tons of advantages for sellers to gain by implementing such a feature.

However, while there are a myriad of benefits, most of them boil down to having a solid brand and more revenue.

The bottom line is that when it comes to the buy now, pay later phenomenon sweeping the eCommerce industry, retailers are wise to get in on the action as a means of reducing cart abandonment, acquiring new customers, and generating more conversions, among other perks.

That said, even with all of the buy now, pay later benefits for eCommerce retailers, this feature is not a sales panacea. Therefore, if your brand wants to make sure that it is maximizing its revenue potential, then reach out to.

Our award-winning team of seasoned pros can help to optimize your site flow to turn more site visitors into loyal customers.