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3 Buy Now, Pay Later Options for Retailers

Adding these services gives customers an alternative payment option.

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As buy now, pay later services become increasingly popular among shoppers (see Consumer Snapshot on page 22 for more on this), retailers should consider adding these services to their websites or in-store payment options. Below are three of the most popular buy now, pay later service providers that can enhance your retail business.


Used by home decor retailers like Wayfair and Room & Board, Affirm offers both online and brick-and-mortar retailers a zero- to low-interest financing option for customers. Unlike credit card companies, which charge compound interest, Affirm charges simple interest on purchases, meaning interest rates are determined by the price of the initial purchase, not the price plus accrued interest. Customers can be pre-qualified early in their retail journey so the dynamic messaging is customized for them throughout their shopping experience. Payments can either be split or made in installments, with terms from six weeks to 36 months. Customers always know their total up front, and there are no hidden fees, late or otherwise. Retailers can customize the service based on their needs, with tailored term lengths and promotional zero interest offers. Affirm’s Adaptive Checkout feature clearly presents financing options to customers, with terms and rates that the retailer can customize. www.affirm.com


More than 16 million shoppers have used Afterpay to finance their purchases, 73 percent of whom are Millennials and Gen Z, according to the company’s website. Afterpay purchases have a clearly defined payment schedule, with customers expected to make a payment every two weeks, totalling four payments over six weeks. The service does not run an external credit check, and more than 90 percent of customers are approved. Afterpay integrates with a number of e-commerce and POS providers, including Shopify, Stripe, Squarespace and more, and the company can also create a bespoke system for retailers with their own web developers. Customers can manage their online purchases through the Afterpay app, and retailers are paid within days of the transaction. In-person financing is also available. Customers download the Afterpay app, set up the Afterpay Card within the app, and are able to use the digital card in-store via Apple Pay or Google Pay. There is currently a waitlist for retailers to add the in-store option. www.afterpay.com


PayPal offers the most flexibility for retailers, with options to serve any retail situation, from e-commerce to brick and mortar, and anything in between. The buy now, pay later service, called PayPal Pay Later, is available at no extra cost to existing PayPal Checkout customers. The service gives customers two additional payment options. Pay in 4, the company’s financing service, requires customers to make an interest-free payment every two weeks, with four payments in total. PayPal Credit gives customers a longer payback period, and purchases over $99 are interest-free if paid in full within six months. The credit option requires a credit check, while the Pay in 4 option does not. PayPal’s dynamic messaging presents the most relevant Pay Later option on product pages, and clearly communicated options at checkout can further help them make the right choice for them. Retailers are paid upfront and customers can manage their payments from the PayPal app. www.paypal.com

Benefits of Offering a Buy Now, Pay Later Option

Reframing the price of more expensive items into manageable payments means larger transactions. Affirm says businesses with pay-over-time messaging on their site saw a 58 percent increase in overall average order value.

The popularity of financing among younger generations helps introduce new customers to your retail brand.

Customers who see a buy now, pay later option are more likely to complete their purchase while browsing. Afterpay’s retail partners report an average 20 percent increase in cart conversion and more repeat customers.

With no credit checks and zero or low interest rates, buy now, pay later is less risky than credit card purchases. PayPal says 56 percent of customers prefer to pay in installments rather than use a credit card.

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