Buy Now, Pay Later
Buy now, pay later (BNPL) lets the customer get the item now and pay later, often in interest-free installments, while the provider carries the credit risk.
What is Buy Now, Pay Later?
Buy now, pay later (often shortened to BNPL) is a payment method where the customer receives the item immediately and pays for it later — typically split into a few interest-free installments if paid on time. A third-party provider such as Klarna, Riverty, or Anyday settles the full amount with the store at checkout and takes on the credit and fraud risk itself. In return, the store pays a fee that is usually higher than a standard card fee.
Why does Buy Now, Pay Later matter?
BNPL removes some of the friction a large amount creates at checkout. By splitting the payment, you lower the perceived price, which in practice lifts both the conversion rate and the average order value and can reduce cart abandonment. The downside is higher fees and tightening rules: BNPL is increasingly regulated as consumer credit in the EU, so terms and marketing must be clear.
Common use cases
- Stores with a high average cart (furniture, electronics, bikes), where installments make the price more manageable.
- Fashion and beauty, where a “try before you pay” flow reduces hesitation on pricier orders.
- Nordic stores, where Klarna and invoice payment are an expected standard.
- B2B or larger orders, where deferred payment improves the customer’s cash flow.
Shopify perspective
In Shopify, BNPL is added either via Shop Pay Installments (powered by Affirm, US merchants on Shopify Payments only) or via third-party providers like Klarna, Riverty, or Anyday installed as a payment app. Enable the provider under Settings → Payments, and surface the BNPL message on the product page, not just at checkout. Test with realistic amounts, and clarify who owns fees, payouts, and error handling so finance and support can act quickly.