7 Buy Now Pay Later (BNPL) companies for your online business in 2023
By Storeplum Editorial
Posted | 4 min read
Buy now, pay later (BNPL) companies offer customers the ability to make purchases and pay for them at a later date, often with little or no interest like four installment payments. These companies have seen a surge in popularity in recent years, as they allow consumers to make purchases they may not be able to afford upfront.
Some popular BNPL companies include sunbit, Afterpay, Klarna, and Affirm. These companies partner with retailers to offer their services at checkout, and typically charge merchants a fee for each transaction.
Many such companies have seen significant growth in recent years, as more and more consumers turn to them for a more flexible way to pay for their purchases and get best buy now, pay later options.
However, the industry is not without its controversy, as some critics argue that these companies make it too easy for consumers to rack up debt in cases of late payment. Let's take a look at some of the best BNPL companies suitable for online business.
Afterpay
One of the most popular BNPL providers in u.s, Afterpay allows customers to make four interest free payments on their purchase, with the first payment due at the time of purchase. Customers can use the single-use virtual card to pay or the afterpay card to pay for purchases.
It's available both online and in-store and can be used to purchase a variety of items, including clothing, electronics, and home goods.
| Pros | Cons |
|---|---|
| No interest fees offer a significant advantage compared to credit cards | Steep late fees which compound very soon if not careful |
| Easy to use checkout options | Encourages overspending |
| Makes purchases accessible to masses | Not all online stores accept Afterpay |
| No credit check | Although there's no credit check, late fees can affect credit scores |
Klarna
Also one of the most used bnpl platforms in the US is Klarna, this offers customers the ability to pay for their purchases in parts as pay in 4 is available that too interest free or pay later with bnpl plans like financing options. Klarna's offerings are similar with Afterpay to some extent.
Klarna's payment services allow customers to make purchases online and pay for them later or in installments. Customers can also use the "Pay in 30 days" feature to delay payment for 30 days without any interest or fees.
The company also offers a service called Slice It which allows customers to spread the cost of their purchase over several months with interest. As of 2023, Klarna has also expanded beyond payment services to offer a range of other financial products, such as savings accounts and insurance.
| Pros | Cons |
|---|---|
| Flexible payment options | Steep late fees which which can be chaotic if not used responsibly |
| Fast checkout experience | Available in USA and select countries in Europe only |
| Increases purchasing power for masses | Encourages to accumulate debt |
| No interest or related fees | Although there's no credit check, late fees can affect credit scores |
Affirm
Affirm allows customers to split the cost of a purchase into monthly payments over a set period of time, typically ranging from three to 36 months. The company partners with a range of online retailers and allows customers to apply for loans directly through its platform.
Affirm is commonly used among the bnpl platforms, It offers customers the ability to pay for their purchases over a set period of time, with interest rates that are disclosed upfront. The company also offers in-store pay later options.
Besides this, the company also offers a mobile app that allows customers to manage their loans, make payments, and track their spending. The app provides personalized insights and recommendations to help customers stay on top of their finances.
| Pros | Cons |
|---|---|
| Transparent and flexible payment options | High interest rates |
| No hidden fees | Credit checks may afffect credit score |
| Loan approvals are processed in minutes | Available in USA and Canada only |
| Mobile app to view financial health and spending habits | - |
Sezzle
Sezzle is one of the highest rated BNPL service for online retailers. Sezzle's payment platform is designed to appeal to younger shoppers who prefer flexible payment options and the ability to manage their finances.
The company allows customers to split the cost of a purchase into interest-free installments, typically over six weeks, with the first payment due at the time of purchase.
Apart from this, Sezzle partners with a range of online retailers, primarily in the fashion, beauty, and home goods industries. Just like Affirm, Sezzle also comes with a mobile app which allows customers to manage their payments, view their transaction history, and get real-time support from the company's customer service team.
| Pros | Cons |
|---|---|
| Transparent and flexible payment options | Late fees are steep |
| No hidden fees | Limited partnerships with retailers |
| Loan approvals are processed in minutes | Currently only available in the United States, Canada, Australia, and New Zealand, |
| Soft credit checks without impacting credit score | - |
Zip
Zip is a US-based fintech company that provides a buy now, pay later service for online and in-store purchases.
Zip allows customers to make four payments that are interest free on their purchase, with the first payment due at the time of purchase, allowing customers to pay over time; with payments due every two weeks.
The company partners with a range of online and offline retailers across a variety of industries.
Zip conducts a soft credit check on customers who apply for its service, which does not impact their credit score. They also charge a late fee if payments are not made on time.
Laybuy
Laybuy is a New Zealand-based financial technology (fintech) company that provides a buy now, pay later service for online and in-store purchases. Laybuy allows customers to split the cost of a purchase into six interest-free payments, with payments due every week.
The company conducts a credit check on customers who apply for its service, which can impact their credit score. The company also charges late fees if payments are not made on time.
Apart from it, Laybuy's mobile app allows customers to manage their payments, view their transaction history, and get real-time support from the company's customer service team.
| Pros | Cons |
|---|---|
| Simple and flexible | Late fees on every missed payment, which could add up quickly |
| No hidden fees | Limited partnerships with retailers |
| Easy approvals | Currently only available in the New Zealand, Australia, and the United Kingdom |
| Soft credit checks without impacting credit score | - |
Clearpay
Clearpay is a popular buy now, pay later service that provides a flexible and convenient way for customers to pay for purchases over time. One of the major advantages of Clearpay is that it does not charge interest on purchases, making it a more affordable option compared to traditional credit cards or personal loans.
The company also has a large network of retail partners, which means customers can use the service to make purchases at a wide range of online and brick-and-mortar stores.
Just like any other BNPL service provider, Clearpay's payment options can lead to debt accumulation if customers do not use them responsibly or are not able to make their payments on time.
Lastly, Clearpay is the European brand of Afterpay, a popular BNPL method in Australia and North America.
Benefits of using buy now pay later options for your online business
Increased sales: These options will help in increasing sales by making it easier for customers to make payments, unlike other bnpl offers this service when customers don’t have the funds available upfront. This will lead to increase in revenue for your online business.
Increased customer loyalty: Offering such charge late service can also increase customer loyalty, as customers are more likely to return to your business if they have a positive experience with it.
Improved cash flow: By using this, businesses can receive purchase amount payment for their products or services up front, while the customers pay the full amount in installments over time. This can help improve cash flow for the business and increase large purchases.
Reduced risk of default: Such companies typically assume the risk of default, meaning that the business is not responsible for collecting payments from customers with the help of a payment plan. This can reduce the risk of bad debt for the business.
Reduced administrative costs: These companies typically handle the administrative tasks associated with collecting payments from customers, which can reduce costs for the business which are the payment fees, per order placed by the customer.
Increased customer base: Such options can help attract new customers who may not have been able to afford to make a purchase otherwise. Many prevailing BNPL apps of 2023, have become a great pay later platform with options like installments that customers need to pay monthly.
Improved credit score: BNPL companies help your business to build credit check and credit bureaus. These apps also offers services which will bring plenty of credibility to your online business which will later be beneficial as it grows with time.
Many bnpl providers are a way for consumers to make purchases they may not be able to afford upfront and pay for them over time, often customers may have to pay interest or no interest like pay in 4 plan and charge late fees may apply. However, it's important for businesses to be aware of the fees associated with using pay later apps and to carefully evaluate whether the benefits outweigh the costs.
Integrate BNPL with Storeplum
With the above suggestions for companies that offers bnpl and how integrating those with your online business can benefit your company. Integrating these with your online business in any way like shopping cart plug in or custom integration.
Services like BNPL attracts customers more than popular services like GPay, Paypal and Apple pay as consumers pay at their own suitability. There are plenty of buy now, pay later companies in thismarket but to find the pay later provider that works out best for your might be a tedious task but it has plenty in-store benefits for your online business.
Even if it’s a first time with buy now, pay later for a customer, it makes the task easy for them to buy items online.
Using a BNPL offering with Storeplum is easy. By default Storeplum offers access to these services using Stripe as a gateway provider. Although we don't support subscriptions with BNPL at this time.
Final Take
Integrating bnpl options into a small business can be a great way to increase sales and provide customers with more flexible payment options.
By allowing customers to split their purchase into multiple payments, BNPL can make it easier for them to afford larger or more expensive items.
Although it’s also important to be aware of the fees associated with using a BNPL service and choose the one that is most cost-effective for your business.
What is the best BNPL company?
As of 2023, Affirm has been reported as the overall best buy now pay later company. It earned this reputation with highest ratings from customers and the ability to not affect credit scores.
How big is the US BNPL market?
It is expected that 9% of all online purchases will be made using BNPL by 2030 in US.
What is the difference between credit card and BNPL?
Almost all of the BNPL plans do not charge any interest unlike credit cards. With BNPL, a typical timeline is anywhere between 10-20 days whereas with credit card, the timeline to pay back without any interest is about 45 days on an average.
Storeplum's in-house editorial team brings to you the best content when it comes to growing your online business on the Internet. We write about growth hacks, case studies, government schemes and other related information for e-commerce business.
