"Buy now, pay in 3 interest-free instalments" is a phrase showing up on more and more online stores, not just big fashion or electronics brands. Buy now, pay later (BNPL) lets the customer complete the purchase immediately while an external provider (Klarna, Scalapay, Afterpay, among others) charges them in several instalments, with that provider taking on the risk of non-payment, not the store.
Why it raises average order value when enabled
When a €300 product is presented as "3 payments of €100, interest-free," the psychological barrier to spending drops noticeably, even though the total amount is exactly the same. It is not that the customer spends more than they can afford, it is that they perceive the immediate outlay as smaller, and that reduces friction right at the moment of deciding.
How it works for the store, in practice
The store receives the full amount at once, like any normal sale, minus the BNPL provider's commission. It is the provider who takes on the risk that the customer might not pay one of the following instalments, not the store. From a cash-flow point of view, it is a normal sale with a slightly higher fee than a standard payment gateway.
The cost you need to factor in before enabling it
BNPL providers' commission is usually higher than a traditional payment gateway's, so it is worth calculating whether the expected increase in average order value and conversion offsets that extra cost, rather than enabling it simply because competitors have it.
What kind of product it makes the most sense for
It works especially well for mid-to-high priced products (€200 upwards), where paying the full amount at once really is a barrier. For low-ticket products, the effect is much smaller and probably does not justify the added cost of offering it.
Frequently asked questions
Does my store take on the risk if the customer does not pay one of the instalments?
No, that risk is taken on by the BNPL provider, who has assessed the customer's creditworthiness before approving the instalment plan; the store gets paid the full amount upfront.
Is it easy to integrate buy-now-pay-later into platforms like Shopify or PrestaShop?
Yes, most BNPL providers offer plugins or direct integrations for the most common ecommerce platforms, with no need for complex development.
Is buy-now-pay-later suitable for B2B customers as well as consumers?
There are specific BNPL solutions aimed at businesses, with longer terms, but they are a different product from consumer BNPL, with different terms and providers.