The merchant's guide to Buy Now, Pay Later (BNPL)

What is BNPL?

BNPL is short for Buy Now, Pay Later. BNPL offers consumers an easy way to stagger payments over time, often interest-free. Rather than paying the total purchase price at point of sale, the customer commits to a fixed payment plan, while you, the merchant, still receive the full amount upfront from the BNPL provider.

For consumers BNPL balances immediacy with affordability. For merchants it is a way to extend short-term credit where the risk of repayment is absorbed by the provider.

DigitalSilk reports that in 2024, global BNPL transaction value hit $340 billion and is forecasted to expand at a 12.3% compound annual growth rate through to 2030. In the US alone, 86.5 million consumers used BNPL services in 2024, and the market is expected to reach $124.82 billion by 2027.

What is the BNPL user experience for consumers?

• At checkout: Customers choose BNPL as their payment option, whether online shopping or in-store.
• Quick application: They enter basic personal details and receive an instant approval decision.
• Repayment plan: Typically the provider will offer short-term options, like four interest-free instalments over six weeks, and in some cases long-term plans for larger purchases which include interest.
• Credit check: Many providers perform soft checks that don’t affect credit scores.
• Payment flow: Once approved, the customer completes the purchase, and the BNPL provider pays the merchant in full.
• Ongoing experience: The customer repays the provider directly over the agreed term.

Different BNPL providers

Klarna, BillEase, Kredivo, Tamara, Affirm, Afterpay and Pagaleve are well-known BNPL brands in their respective markets. Each has regional strengths and different pricing, approval, and repayment models.

Benefits of BNPL for merchants

• Higher conversion rate: Allowing customers to pay with BNPL means more are likely to complete purchases.
• Increased order value: Shoppers tend to spend more per transaction. In fact, merchants who implement BNPL frequently report higher average order values compared to those offering only card-based payments.
• Access to broader audiences: Millennials and Gen Z are leading BNPL adoption, often using more than one provider at any time.
• Better customer experience: More payment flexibility makes purchases smoother.

BNPL as a flexible payment option

BNPL works best when presented alongside other options. Rather than replacing cards or wallets, it adds choice. For mobile-first markets, adding BNPL as a finance option to pay can reduce abandonment significantly. According to DigitalSilk's report, BNPL accounted for 6% of e-commerce payments in the US in 2024, up from 5% the year before.

Compared to credit cards, BNPL is often faster to approve and easier to understand. It also avoids revolving debt, which may appeal to financially cautious customers.

BNPL for marketplaces and platforms

For multi-merchant marketplaces, BNPL introduces complexity. Antom’s Combined Payment solution allows buyers to pay once, even if they’re purchasing from multiple sellers. Funds are then split automatically.

With Flexible Settlement, commissions, influencer payouts, and logistics costs can also be handled post-transaction in multiple currencies. This matters in BNPL scenarios where disbursement timing and rules vary by provider.

Costs and risks of BNPL for merchants

BNPL can carry higher transaction fees than standard card processing. Providers typically charge a flat fee plus a percentage. Still, the trade-off can be in your favour. As reported by GrandView Research, higher conversion rates and repeat purchases help offset the increased cost.

Other considerations:

• Late fees for consumers: These are charged by the provider, not you the merchant, but consumers may conflate you with the provider and so there could be some reputational impact.
• Refund handling: Processing returns across instalment schedules requires careful reconciliation.

Merchant checklist for choosing a BNPL provider

There’s no one-size-fits-all BNPL solution. The best provider for your business depends on your product type, regions served, technical setup, and customer profile. Here's a structured way to compare your options:

Multiple BNPL providers, one integration

Antom supports a single integration point for multiple BNPL services. Kredivo, Tamara, BillEase and Pagaleve are available out of the box.

This reduces setup friction and gives merchants the ability to switch or add providers without re-integrating or renegotiating terms.

According to DigitalSilk, 63% of BNPL users globally now hold more than one plan(!), which highlights the importance of supporting multiple buy now pay later options in one checkout.

Pros and cons of offering BNPL options

Pros

• Higher sales: BNPL encourages customers to complete purchases they might otherwise postpone.
• Access to new customer segments: Younger customers or those without access to traditional credit are more likely to use BNPL.
• Improved loyalty: Once customers become comfortable using BNPL on your site they are more likely to return.
• Flexible customer journeys: BNPL adds payment choice at the moment it matters most which reduces friction and boosts satisfaction.

Cons

• Higher processing fees: BNPL typically involves a higher cost-per-transaction than traditional card payments.
• Brand risks from defaults: While the provider often absorbs financial risk, customer dissatisfaction from missed payments or penalties can reflect back on the merchant.
• Administration: Overhead to manage refunds, chargebacks, and reconciliation for BNPL purchases may be higher.

Is BNPL right for your business?

BNPL works well for mid-to-high value products, discretionary purchases, and brands with younger or mobile-first audiences. It's less relevant for low-ticket, daily-use goods.

If you're seeing high abandonment, serving emerging markets, or cater to a younger audience, adding BNPL options to your checkout is worth considering.