Leading BNPL Companies Redefining Customer Payment Experiences

Imagine empowering your customers to make larger purchases while increasing your sales and slashing cart abandonment rates by up to 35%. With 60% of consumers more likely to complete a purchase if a flexible payment option is available, Buy Now, Pay Later (BNPL) is more than just a convenience—it’s a proven growth driver.

Businesses implementing BNPL solutions report an increase in average order values by 30-50%, while customer satisfaction scores soar thanks to transparent and manageable payment plans. Beyond these tangible benefits, BNPL enhances customer loyalty, draws repeat buyers, and strengthens brand trust.

Let’s dive into how BNPL can transform your business, key players in this sector, and why it’s a must-have in today’s retail landscape.

An Overview of BNPL

Buy Now, Pay Later services are a payment option that enables customers to split their purchases into smaller, manageable installments, often without incurring interest if payments are made on time.

From a business perspective, BNPL offers a unique opportunity to enhance customer experiences, increase sales, and stay competitive in a rapidly evolving retail landscape. The rise of open banking solutions has further accelerated BNPL’s growth by enabling providers to access real-time financial data, optimize credit risk management, and deliver a seamless payment experience.

Key peculiarities of BNPL:

• Customers gain immediate access to products while spreading out payments over time.
• Businesses receive full payment upfront from BNPL providers, ensuring steady cash flow.
• Many BNPL platforms require minimal credit checks, expanding access for a wider customer base.

Here are some more stats that prove the buy now, pay later services perspective and business value.

How BNPL Works: A Step-by-Step Guide for Merchants

Understanding the mechanics of BNPL is essential for businesses looking to leverage this payment method. Whether you want to integrate a proven BNPL solution or create a custom one tailored to your business model, here’s a breakdown of the process from a merchant’s perspective.

#1 Initiating the Purchase

The customer selects a product, such as a $1,000 laptop, and proceeds to checkout. A high upfront cost may lead to hesitation, making BNPL a compelling alternative for conversion.

Merchant perspective:

• Your role: Ensure the checkout process prominently features BNPL options or custom solutions.
• Advantage: Decrease cart abandonment rates and attract customers seeking flexible payment options.

#2 Customer Chooses BNPL

The customer opts for BNPL at checkout and activates the system. Whether using an integrated solution or a custom BNPL product, the customer sees installment options (e.g., four payments of $250).

Merchant perspective:

• Your role: Partner with a BNPL provider or leverage a custom-built BNPL system designed for transparency and user experience.
• Advantage: Offer flexibility that encourages higher-value purchases and builds trust.

3. Credit Evaluation by BNPL Provider

After selecting BNPL, the provider or custom system evaluates the customer’s creditworthiness. Approval is swift, and customers either proceed or select alternative payment options.

Merchant perspective:

• Your role: Provide necessary data (e.g., product, pricing, customer insights) for seamless credit evaluation.
• Advantage: Transfer credit risk to the BNPL provider or a tailored system that aligns with your risk tolerance.

4. Order Fulfillment

Once approved, the merchant receives immediate payment from the BNPL provider or internal system. The product is shipped promptly, ensuring customer satisfaction.

Merchant perspective:

• Your role: Focus on operational efficiency and timely delivery.
• Advantage: Secure upfront payment while offering customers immediate access to products.

5. Repayment

The customer follows the repayment schedule set by the BNPL provider or your custom-built solution. Merchants remain unaffected by repayment risks.

Merchant perspective:

• Your role: Monitor BNPL performance metrics and customer feedback to optimize future strategies.
• Advantage: Enhance customer loyalty and encourage repeat purchases without financial exposure.

By offering or creating BNPL solutions, you position your business at the forefront of payment innovation. Let’s explore how leading BNPL providers and custom solutions are transforming the industry to deliver success for merchants.

Top BNPL Companies to Consider

Buy Now, Pay Later (BNPL) has emerged as a key strategy for businesses to boost sales, reduce cart abandonment, and appeal to customers seeking payment flexibility. For fintech companies, choosing the right BNPL provider means leveraging solutions that drive conversions, offer seamless integration, and provide valuable insights.

Here are the top six BNPL providers featured in the Demand Sage report.

#1 PayPal Credit

PayPal Credit leverages the global trust and reach of PayPal, offering businesses an easy way to integrate BNPL into their existing checkout flows. According to PayPal, merchants offering its services see a 56% higher checkout conversion rate compared to other payment methods.

Key facts:

Business advantages:

• Ease of integration: Works seamlessly with existing PayPal systems, minimizing development efforts.
• Global reach: Enables businesses to target international audiences with a trusted payment solution.
• Customer trust: Builds on PayPal’s reputation, reducing checkout friction and boosting sales.

Disadvantages:

• Limited marketing support: Unlike other BNPL providers, PayPal Credit offers minimal co-branded marketing or promotional tools to help merchants drive adoption.
• Complex customer experience: The 0% interest offer is conditional (only for purchases over $99 and paid within six months), which can confuse customers and lead to hesitation during checkout.
• Customer eligibility constraints: PayPal Credit requires customers to apply for a line of credit, which adds friction compared to instant approval BNPL solutions.

Best for:

Fintech businesses looking to expand globally with a trusted and reliable BNPL solution. PayPal Credit is ideal for companies already using PayPal and seeking seamless integration.

#2 Afterpay

Afterpay is a market leader in the retail and lifestyle sectors, especially popular among millennial and Gen Z shoppers. According to Afterpay, merchants experience a 20–30% increase in average order value (AOV) and over 40% higher repeat purchase rates.

Key facts:

Business advantages:

• Customer appeal: Attracts younger audiences with no-interest installment plans.
• Increased order value: Boosts AOV and encourages repeat purchases.
• Actionable insights: Provides merchants with customer behavior analytics to refine marketing strategies.

Disadvantages:

• Narrow loan term options: Afterpay exclusively offers a pay-in-four model, which may not suit customers needing more flexible or extended repayment options.
• Customer spending limits: Strict spending caps based on customer behavior can limit high-value purchases, potentially reducing conversions for merchants selling expensive items.
• Geographic limitations: While Afterpay has a strong presence in specific regions like the US, Australia, and New Zealand, its coverage is not as expansive as global players like PayPal Credit or Klarna.

Best for: Businesses in retail, fashion, or beauty targeting younger, budget-conscious customers. Afterpay is especially effective for platforms seeking to increase repeat purchases and AOV.

#3 Affirm

Affirm specializes in high-ticket purchases, offering flexible payment terms that appeal to customers making significant investments. Businesses partnering with Affirm report a 20% increase in sales conversions and a 60% boost in AOV for high-priced items.

Key facts:

Business advantages:

• Customizable terms: Merchants can tailor repayment options to align with their product offerings.
• High-ticket conversion: Increases sales for expensive products like electronics, furniture, or travel.
• Risk management: Advanced fraud prevention and credit checks reduce financial risks for businesses.

Disadvantages:

• Complex integration: Affirm’s customizable repayment options can require more development effort for businesses compared to simpler BNPL solutions.
• Credit check dependency: Affirm relies heavily on credit checks, which may exclude customers with limited credit histories, reducing its appeal to broader audiences.

Best for: Fintech platforms catering to high-ticket industries like travel, furniture, or electronics. Affirm is the right choice for businesses that need flexible repayment terms and robust credit assessments.

#4 Klarna

Klarna is known for its innovative approach to customer experience, with tools that drive engagement and loyalty. Klarna reports that businesses using its platform see a 68% increase in conversion rates and a 41% higher AOV.

Key facts:

Business advantages:

• Innovative tools: Provides marketing integrations, co-branded campaigns, and advanced analytics.
• Global scalability: Klarna’s presence in 45+ countries makes it ideal for international expansion.
• Customer-friendly: Flexible repayment options and a user-friendly app enhance customer satisfaction.

Disadvantages:

• Complex product suite: Klarna’s wide range of tools and repayment options can overwhelm merchants unfamiliar with BNPL, requiring a steeper learning curve.
• Customer retention challenges: As Klarna’s brand is customer-facing, merchants risk losing brand visibility, as customers often associate the transaction with Klarna rather than the merchant.

Best for **Fintech businesses focused on e-commerce product development and delivering a premium customer experience. Klarna’s advanced tools make it a strong choice for platforms seeking to build loyalty and drive engagement.

#5 Zip

Zip (formerly QuadPay) is a simple, interest-free BNPL solution that appeals to businesses with high transaction volumes. Zip’s fast integration and flexibility make it attractive for fintech platforms. Reports indicate that merchants offering Zip experience a 30% increase in checkout completions.

Key facts:

Business advantages:

• Ease of use: APIs and integration guides make it simple to implement.
• No customer credit checks: Broadens the customer base by approving a wider range of users.
• Clear pricing: Transparent fees make it attractive for merchants.

Disadvantages:

• Limited flexibility for merchants: Zip’s focus on short-term pay-in-four plans doesn’t accommodate merchants needing options for high-ticket or longer-term purchases.
• Smaller loan amounts: Zip’s lending limits are relatively low, which may not cater to businesses selling higher-priced products.
• Regional focus: While growing, Zip’s global presence is less extensive, limiting opportunities for merchants targeting international customers.

Best for: Fintech businesses handling high-volume, smaller transactions. Zip is ideal for platforms prioritizing speed and simplicity in their BNPL offerings.

How to Get Started with a BNPL Solution

Developing a BNPL platform can provide significant advantages, from increased customer retention to higher conversion rates. However, the path to implementation is often challenging. Businesses need to navigate strict financial regulations, integrate new systems with existing infrastructure, ensure scalability to handle growing transaction volumes, and manage credit risk effectively. Success requires a strategic approach and a strong technological foundation.

When embarking on this journey, businesses typically have three main options:

Integrating Existing Providers of BNPL Solutions

Integrating an established BNPL provider is the most straightforward option for businesses seeking to quickly implement BNPL capabilities without the need to build a solution from scratch. This approach allows you to leverage the provider’s infrastructure and regulatory compliance while focusing on seamless integration with your systems.

Best for: Businesses looking for a fast and cost-effective BNPL implementation with minimal development effort. Ideal for companies that want to enhance their payment options without taking on regulatory complexities or extensive customization.

Example: DashDevs helps businesses integrate with leading BNPL providers like Klarna, Afterpay, and PayPal Credit. We ensure smooth implementation, optimize user flows, and customize integrations to align with your brand and operational goals. This option is ideal for businesses aiming to offer BNPL with minimal development time and effort.

Custom Development of an BNPL Solution

For businesses with unique requirements or operating in niche markets, custom development offers unparalleled flexibility. This approach allows you to build a solution fully tailored to your business goals, market demands, and customer needs.

Best for: Companies requiring a bespoke BNPL system due to unique regulatory environments, specific market needs, or differentiated business models. Ideal for fintech startups, established lenders, or businesses operating in underserved markets.

Case example: Twisto, a prominent European payment provider, developed a fully customized BNPL platform to meet their growing market demands. Our CEO, Ihor Tomych, who served as CTO for the project, led the development of a scalable and user-centric platform that ensured compliance with strict European financial regulations. The project achieved:

This tailored approach allowed Twisto to establish itself as a leader in the European BNPL market.

White-Label BNPL Solution Development

White-label solutions are ideal for businesses seeking to enter the BNPL space quickly and efficiently. These pre-built platforms come equipped with core functionalities like payment processing, credit assessment, and analytics, simplifying development and reducing time-to-market.

Best for: Businesses that want to offer a branded BNPL solution without building from scratch. Suitable for banks, retailers, and fintech companies looking for a fast, scalable, and regulatory-compliant BNPL implementation.

Case Example: DashDevs’ Fintech Core offers a modular, scalable platform designed for BNPL implementation. It provides businesses with ready-to-use features and ensures compliance, making it a practical choice for those looking to minimize complexity while maintaining flexibility for future growth.

Conclusion

With 60% of shoppers preferring retailers that offer BNPL and cart abandonment rates dropping by 35%, it’s clear this is more than a passing trend. Businesses using BNPL also see 30-50% bigger baskets and more loyal customers coming back for more.

At DashDevs, we make adopting BNPL simple and effective. With over 20 years of fintech expertise, we know how to create solutions that work for your business and your customers. From smooth integration to ensuring everything’s compliant and user-friendly, we’re here to help you grow.

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