What is BNPL? Buy Now, Pay Later, the new payment trend

Have you heard of this new payment system? Do you know what it consists of? BNPL stands for Buy Now Pay Later. As you can see, it’s nothing futuristic, this payment method has been around for a long time. The main difference is that BNPL has been optimised for the online sales market, offering multiple benefits to both users and ecommerces. These include commission-free deferred payment for buyers and an increase in the average online purchase ticket for sellers. This sector, already booming for years, suffered an exponential growth due to the COVID-19 pandemic, where many entrepreneurs had to look for alternatives to be able to move forward in a time full of restrictions. This uncertainty also made consumers more wary and cautious when it came to making purchases. Due to all these circumstances, the BNPL became established and has spread in record time. Especially in the USA and Scandinavian countries. It took a little longer to reach Spain, but it has done so with force and it seems that it is a payment method that is going to stay with us.


Why is Buy Now Pay Later so successful?

BNPL has revolutionised the way people shop and finance their spending. Surely, a large part of its success is due to its simplicity. It allows users to buy something, mostly online but can also be in a physical shop, and receive it now, without having to wait to pay for it. The buyer can choose between deferred or interest-free payment options. And what is the advantage for retailers who have activated BNPL as a payment method? Well, they will receive the full amount of the purchase immediately, without having to wait for the buyer’s chosen instalments to be paid. Of course, this has a cost for the retailer, but it usually pays off, as having this payment method helps to increase sales. And not only that, it also helps to increase sales thanks to the peace of mind that the customer feels when being able to pay comfortably. In addition to all the circumstances mentioned above, there is also the weight of the buying habits and mentality of the new generations such as millennials and Generation Z. Both demographic groups do not like to pay with a payment method.

They prefer to opt for payment methods that allow them to make their purchases conveniently and with control. At BNPL they have found the perfect way to be able to get what they want or need immediately, without having to compromise on quality. And without having to pay interest to any financial institution. This new payment trend also replaces the traditional small loans offered by financial institutions. Those that were set up to cover purchases of a certain amount, such as holiday packages, technological equipment, sports accessories, etc. Multiple advantages for the buyer There are many benefits for BNPL users. Just as a summary, we highlight the most important ones:

  • Immediacy: you can enjoy the service or product purchased from the first moment. Without waiting for it to be fully paid for.
  • No extra costs: you have options where you can pay in instalments or defer payment without having to pay interest or commissions.
  • Peace of mind: payment in easy instalments that you know you can afford.
  • Simplicity: no need for financial analysis or bank approval for each purchase. As long as you meet the agreed obligations, you can make use of this system.


How does the BNPL (buy now, pay later) work?

In order to opt for Buy Now Pay Later, the ecommerce only has to contract this service with one of the many fintechs that market this payment method. Once this has been done, they only have to incorporate it into their payment gateway as another option. This whole process is simple thanks to the use of plug-ins compatible with the majority of e-commerce platforms offered by the different BNPL providers. Thus, in just a few steps, you will be able to activate this option in your ecommerce. From that moment on, any user will be able to pay for their purchases using BNPL and the seller will benefit from the confidence that this payment method brings to the buyer. Not only will they gain convenience, but they will also be encouraged to increase their average spend per purchase. Fintech companies such as Afterpay – Clearpay and Klarna are some of the most important in the US and European markets. In Spain, one of those dominating the sector is SeQura. And more and more financial institutions are taking notice of this new trend and are making moves to incorporate it in some way into their portfolio of services. Examples of this are MasterCard, Visa and PayPal. Even Spanish banks, as they did with Bizum, are joining forces to offer their own BNPL service under the name Plazox.

How does BNPL benefit your online business?

If a payment method is proving so successful, it is because it is a win-win for all players involved. The benefits are not only for shoppers and fintech companies. Without a doubt, ecommerce is also a winner. How? Here we explain the main advantages of the “buy now pay later” payment method for retailers.

Increased sales

The simple fact of having BNPL means that the user often chooses to make the purchase in your online shop instead of your competitors. There are studies that prove that younger buyers (millennials and Generation Z) close more sales processes if the ecommerce has the Buy Now Pay Later payment method. For the convenience and simplicity of management, without long processes of authentication and study. And, as you already know, increasing the conversion rate translates into an increase in the number of sales.

Increase in Avarage Order Value (AOV)

Ecommerce users tend to increase their average spend per purchase when they make a “buy now pay later” purchase. These deferred payment services allow them to pay for larger purchase amounts. In addition, because they are exempt from interest rates, they do not make the price of the product or service even more expensive. They only have to worry about meeting the agreed instalments to avoid late payment charges and/or penalties.

No risk of non-payment

The ecommerce receives the full amount of the purchase (minus the agreed commissions) at the moment the sale transaction is closed. If the customer defaults on any of the agreed payments, you will not be affected, as the debt is contracted directly between the BNPL service operator and the buyer. Zero suffering in your finances due to late payments.

Customer loyalty

Ecommerce users like things easy and transparent. Knowing that your online shop offers them the BNPL payment system, plus having a good service experience, will make them want to come back. Customer loyalty will also increase the conversion rate by reducing or eliminating objections to your brand.


Differences between BNPL payments and traditional credit cards

Both payment methods are quite similar, but the main difference lies in the advantages that BNPL systems have for the consumer. Traditional credit cards from banks or financial institutions also allow deferred payment without interest, but only until the beginning of the month following the purchase. If the purchaser wants to pay in instalments, he or she will normally have to pay interest or fees associated with such a transaction. BNPL providers, on the other hand, do not charge the user any surcharge for deferred payment. For retailers, both credit card payments and Buy Now Pay Later payments do have a cost. Possibly the cost associated with BNPL is higher than the fees for card payments, but in the end it is compensated by the benefits associated with this booming payment system. Above all because of the increase in AOV and customer loyalty.

Are you going to bet on BNPL in your ecommerce?

Although “buy now pay later” boomed during the pandemic, it has not yet reached its peak. The forecast is that the use of this method will continue to grow in ecommerce by 2023. Currently, payment by credit card is available in almost all e-commerce shops, while payment by BNPL is not yet as widespread. Right now, having this payment method can make the difference between you and your competitors. Do you still have doubts? Here is a summary of the main advantages of BNPL:

  • Increase your sales.
  • Increase the average ticket per customer.
  • More sales completed.
  • Customer loyalty. And speaking of making the difference with the competition… Boardfy can help you leave them behind thanks to the price monitoring of your competitors.


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  • Keep your rivals under control.
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