“Buy Now, Pay Later”: What it is and its advantages

In today’s eCommerce landscape, payment methods continue to evolve to adapt to the new needs and expectations of consumers. In this context, a payment option has emerged that has gained popularity among users and merchants: “Buy Now, Pay Later”. This alternative responds to a growing demand for financial flexibility, driven both by more dynamic consumption habits and by economic factors that affect consumers’ pockets. Below, we explain what this tool consists of and everything you need to know, whether you are a customer or represent a business.

What is “Buy Now, Pay Later”?

“Buy Now, Pay Later”, also known as “BNPL”, is a payment method that allows purchases to be split and deferred. Instead of paying the full amount at the time of the transaction, customers can postpone payment, often until after they have received the products or services.

This method is commonly used for purchases of moderate value, such as fashion items, sports equipment, or household appliances. It is a good alternative for accessing products that we need immediately but cannot afford to pay in full at that moment.

For example, if an essential appliance such as a fridge breaks down and you do not have the liquidity to replace it immediately, “Buy Now, Pay Later” allows you to acquire a new one and pay for it in convenient instalments, with complete flexibility.

At the time of purchase, the customer can choose whether to pay immediately or to defer payment through an automatically granted credit, which must then be repaid in affordable monthly instalments. These credits may include interest or fees, although this is not usually the case. That is why it is important for the customer to be properly informed about the rates and conditions of the payment providers before using it.

How does “Buy Now, Pay Later” work?

To understand how this payment method works, it is important to clarify that PaynoPain is a payment solutions provider, not a BNPL provider itself. In other words, at PaynoPain we act as an intermediary, facilitating the connection between merchants and BNPL service providers, but we do not offer credit directly.

For merchants

1. Contract PaynoPain’s payment services and begin the registration process in our system.
2. Request the activation of your payment methods: from cards and wallets (Apple Pay or Google Pay) to the “Buy Now, Pay Later” service.
3. You will be assigned the provider that best suits your business model: Cofidis, Floa, Klarna, or PayPal “Pay in 3”.
4. Our team will review all the documentation and start the technical integration and configuration.
5. Once your business has been approved, your customers will have the BNPL option available at your checkout.

For users

1. When reaching the checkout of a shop that uses PaynoPain’s payment services, the customer will be able to:
2. Select the “Buy Now, Pay Later” option.
3. Choose the instalment plan that best suits them, depending on what each provider offers.
4. Undergo an automatic credit assessment and provide the required documentation.
5. Complete the purchase if the service is approved.

Which providers work with PaynoPain?

At PaynoPain we work with the main Buy Now, Pay Later service providers. The allocation of the most suitable provider is made according to the type of business, sector, and customer profile, always with the aim of maximising conversion and offering a smooth payment experience.

Benefits of BNPL for consumers

Financial flexibility

It allows customers to acquire products or services immediately without having to pay the full cost of the purchase at once. This is especially useful when facing unexpected expenses or when a significant purchase needs to be made.

No interest

Some providers offer this payment method interest-free, provided that the customer complies with the established payment period. This is a benefit for those who wish to avoid additional financial charges.

Facilitates higher-value purchases

It allows consumers to access higher-value products or services, as they can cover the cost gradually.

Instant approval

The approval of financing is a quick and simple process, nothing like the lengthy procedure of applying for a traditional loan. Financial approval takes less than a minute, eliminating bureaucratic red tape that often causes headaches.

Benefits of BNPL for merchants

Increased conversions and customer loyalty

The removal of financial barriers makes customers’ purchasing decisions easier. This translates into increased sales and prevents the buying process from becoming an obstacle for the consumer.

Offering a more compelling shopping experience not only generates more sales; it also influences long-term consumer loyalty. Securing repeat customers is a major advantage for any business.

Reduced cart abandonment

Cart abandonment is one of the most common challenges in eCommerce. By offering flexible payment options such as “Buy Now, Pay Later”, the cart abandonment rate can be reduced. When customers see that they can spread the cost of their purchase, they are less likely to abandon the cart and more likely to complete the transaction.

Increased average order value

The purchase of more expensive products can increase when the need to pay immediately is removed. Allowing deferred payment makes customers feel more comfortable acquiring higher-value products or services.

Who can use this method?

Any business that meets the requirements set by the BNPL provider can integrate it. These requirements vary depending on the provider and may include factors such as the purchase amount, the user’s credit history, and other financial aspects. A smaller purchase amount will be easier to finance, while larger purchases will require more conditions to be met.

Important considerations

Consumers must inform themselves about the terms and conditions of the payment provider, as well as interest rates and payment deadlines. In addition, the user should evaluate whether the use of “Buy Now, Pay Later” fits their financial situation.

On the other hand, merchants should consider the integration of the method into their existing payment strategy, ensuring that they choose reliable providers and establish clear policies regarding payment and returns management. They should also ensure that the chosen payment provider offers this service in the relevant market and clarify the credit limits granted in each territory.

All payment methods in a single platform

Virtual POS for eCommerce

At PaynoPain, as a payment solutions provider, we help make things easier for your customers with a wide variety of payment methods. Among these, more and more merchants are choosing to integrate our virtual POS to improve conversion and provide a fast and secure payment experience. If you would like to know more about “Buy Now, Pay Later”, do not hesitate to contact us.