Buy Now Pay Later, the Trend Increasing eComm Spending
Buy Now Pay Later (BNPL) is the latest trend increasing consumer spending in eCommerce and has become the fastest-growing payment method the eCommerce industry has seen. Worldpay, a payment processing company and technology provider, reported that in 2020 the BNPL payment made the largest percentage leap rising approximately 78%, accounting for 1.6% of eCommerce spend, and are currently the second most popular way to checkout.

This article explains the Buy Now Pay Later boom, its key benefits, how it prompts consumer spending, and eligibility criteria, among other information eCommerce sellers should know about how the online payment method increases revenue.
- Benefits of Buy Now Pay Later
- How Does Buy Now Pay Later Work on Amazon?
- How Does Buy Now Pay Later Work on Walmart?
- Is Buy Now Pay Later Right for You?
- If Buy Now Pay Later Is Not Right for You
- Conclusion
What Is Buy Now Pay Later?
While this payment method is more prevalent among online shoppers, it can also be offered in stores. However, it is relevant to note that not all purchases are eligible for the BNPL financing option.
According to CNBC, the President of Ally Lending (a digital financial services company), Hans Zandhuis, said that when it comes to BNPL purchases, the average transaction is roughly $200, approximately $100 more had the financing option not been available.
If you are wondering BPNL is regulated, the answer is not really. Although, a study conducted by Juniper, a market research company, indicated that it is only a matter of time until regulations will be placed on Buy Now Pay Later services, such as charging limitations.
What Companies Offer Buy Now Pay Later?

While Affirm, Klarna, and Afterpay are the most popular financial companies that offer Buy Now Pay Later on acquisitions made from participating merchants, several others include Sezzle, Splitit, PayPal, and Perpay. The growing popularity of this payment method has even prompted Goldman Sachs and Apple to partner up and launch a BNPL service called Apple Pay Later. Although terms and conditions may vary for the companies offering BNPL, in terms of the number of payments and interest fees, they operate in the same way:
- Consumers browse products;
- They decide on an item;
- After adding the item to their cart, they proceed to checkout;
- At checkout, they opt for the BNPL payment option;
- Once approved, a small down payment is made;
- Finally, the consumer gets the product and pays off the remaining balance in a series of installments.
Benefits of Buy Now Pay Later
The Buy Now Pay Later financing option on eCommerce sites like Amazon and Walmart has several advantages. Perhaps the most appealing benefit is the positive impact BPML has on the number of products in shoppers’ checkout baskets. For instance, a survey conducted by CouponFollow, a coupon code search engine, that surveyed over 1,000 consumers found that 73% of online shoppers could add more products to their carts because BNPL made it affordable.
The study also indicated that had it not been for BNPL, one in every three customers would have been unable to make a purchase. Essentially, because the BNPL option allows consumers to pay for their products through monthly installments, shoppers can make purchases in larger quantities. In addition to increased sales, other benefits of Buy Now Pay Later include:
- Buy Now Pay Later boosts overall conversion rates by allowing customers to split the cost of purchase.
- Buy Now Pay Later provides customers with facilitated and enhanced shopping experiences.
- Buy Now Pay Later reduces the odds of cart abandonment among shoppers.
- Buy Now Pay Later allows brands to reach new customers who may not have been able to purchase their products otherwise.
- Buy Now Pay Later offers customers credit by eliminating any credit risk.
One of the few inconveniences of Buy Now Pay Later is that the process can get complicated if customers want to return an item they bought through the BNPL option. Merchants who work directly with BNPL providers are responsible for informing the Buy Now Pay Later company of the refund request. Nevertheless, the return process is probably more of a burden to customers than eCommerce merchants.
How Does Buy Now Pay Later Work on Amazon?
In addition, shoppers can use Amazon’s Monthly Payment option, which is available for select products and can be selected during checkout. This option may not be available to all shoppers as eligibility is based on information relating to one’s Amazon account. According to Forbes, consumers on Amazon can split purchases of $50 or more into five monthly installments over four months on select products.
How Does Buy Now Pay Later Work on Walmart?

Like Amazon, after being approved for Walmart’s Buy Now Pay Later program, all shoppers have to do is select the Affirm payment option at checkout. Shoppers can apply for BNPL on their phone by entering how much they are spending then setting an appropriate payment plan.
At Walmart, products that are eligible for BNPL typically cost between $144 – $2,000. Walmart, however, offers a broader selection of products eligible for BNPL. The table below shows the list of product categories Walmart accepts to purchase with the BNPL option.
Is Buy Now Pay Later Right for You?
Depending on the products they offer, the Buy Now Pay Later financing option may be more advantageous to some merchants over others. For instance, it may be that BNPL is more popular among more expensive products such as electronics. The following statistics come from CouponFollow’s survey of 1,003 customers who used BPNL over other payment options. The table in the image below displays a brief list of product categories shoppers are buying with BPNL.

For example, a Forbes study found that while BNPL is more common among millennials (ages 26-40) and Gen Z’ers (ages 21-25), it is less popular among Baby Boomers (ages 56-75). Additionally, eCommerce merchants should strategically weigh the costs and benefits of adding the BNPL option if they operate a business with lower margins.
If Buy Now Pay Later Is Not Right for You
1. Leverage Existing Products With Quality Reviews
2. Partake in Amazon’s Influencer Program
3. Monitor Competitors Price
A best-selling product on Amazon is synonymous with dynamic pricing. To be competitive on eCommerce marketplaces, sellers must ensure that their products are priced low enough to be considered quality but high enough to be considered competitive. One way to ensure you maintain dynamic pricing is to monitor and receive alerts about your competitors’ product price changes and change your product’s price accordingly. For example, consider investing in customizable Amazon products alerting software that allows you to stay on top of any and all changes related to any product on Amazon. Doing so will give you the competitive edge you need to have a dynamic and effective pricing strategy.

Conclusion
Buy Now Pay Later is the future of eCommerce. Not only does BNPL benefit shoppers, but it also benefits merchants in that it can increase conversion rates by encouraging customers to buy products they could not typically afford otherwise. Given the myriad of benefits associated with the Buy Now Pay Later financing option, there is no reason not to jump on the bandwagon. If BNPL is right for your business, be sure to conduct thorough research on the different providers to determine which of their installments offerings and services benefit you most.