8 Buy Now, Pay Later Companies for Your Business (2024)

The proliferation of buy now, pay later (BNPL) companies make it easier than ever to find one that’s right for your customers and your business.

Buy now, pay later companies are being used with increasing frequency in ecommerce. Also known as BNPL companies, these plans allow customers to divide payments into specified installments rather than pay the full amount when purchasing the item.

BNPL apps are easy to use, and have low interest rates and fees as well as credit limits that allow customers to make most common purchases. This makes them an attractive alternative to credit cards.

As a business owner, BNPL makes things easier for your customers, and can increase your bottom line. With BNPL, you can offer your customers a simple way to make payments on purchases, while ensuring you receive the full amount immediately. Once you know the benefits popular BNPL companies offer, you can decide on the best one for your needs.

What are buy now, pay later (BNPL) companies?

BNPL companies create and support an app-based form of payment you can find both online and in stores. In many ways, the BNPL model is similar to a credit card: When a consumer buys products and services using the app, the business receives the payment immediately, and the consumer pays equal payments over a set period of time (often without being charged interest).

BNPL loans offer customers the option to split the cost of large purchases over multiple installments.

For consumers, there are a number of advantages to using BNPL for payment. The repayment structure is simple and straightforward, and BNPL companies usually don’t charge interest or fees for users who pay on time. Additionally, most BNPL apps are easy to opt in to, and the approval process is straightforward. A BNPL company might conduct a soft credit check on new users, which won’t affect a customer’s credit score. Due to its ease of use, BNPL accounted for 5% of global ecommerce transaction volume in 2023 and is expected to reach $452 million in transaction value by 2027.

BNPL apps can be a winning situation for all involved. Consumers can finance purchases they might not otherwise have been able to afford, it reduces abandoned online shopping carts on merchant sites, and BNPL companies earn fees from the merchant for processing the transaction.

The buy now, pay later fine print

Unlike with credit cards, a buy now, pay later payment plan usually doesn’t require users to pay interest. And, consumers find they are generally easier to get approved for than credit cards, allowing them to make large purchases with interest free payments over time.

Taking advantage of a BNPL payment plan won’t affect a consumer’s credit score unless they miss a payment. Missing payments may also result in late fees, and result in a report with credit bureaus.

For businesses, risk is minimal, as chargebacks are often the responsibility of the buy now, pay later provider. As with any online payment method, BNPL loans can be at risk for fraud. Again, usually the buy now, pay later provider will be on the hook. However, good customer service practice dictates that you should take measures to prevent and detect fraud, and engage with customers who fall victim.

⚠️ Note: As with any contract, read the terms and conditions of any BNPL platforms you integrate with your website.

8 popular buy now, pay later companies

Using BNPL apps that have established reputations will remove some of the uncertainty for you and your customers. Here are the eight most popular.

1. Shop Pay Installments

Launched in 2021, Shop Pay Installments by Shopify is a convenient option for businesses already running their stores on the platform. 

The facts

• Shop Pay Installments are offered by Affirm.
• Consumers pay back their BNPL loan in four equal payments or monthly installments up to 12 months.
• Businesses will be subject to an eligibility check and must have Shopify Payments and Shop Pay activated.

Pros

• Increase average order value by up to 50%.
• Provide a 30% faster checkout experience to returning payment installments users.
• Up to 28% fewer abandoned carts.
• Tap into Shop Pay’s 100 million+ user base.
• Consumers have flexible payment options: four installment payments or monthly financing plans up to 12 months.
• Zero late fees for customers.

Cons

• Shop Pay Installments is currently only available in the United States.

2. Affirm

Founded in 2012, Affirm is available in the US at more than 245,000 merchants, and has financed over 17 million purchases.

The facts

• Interest: 0%–30%, depending on the payment plan and user eligibility.
• Loan term: Six weeks, six months, or one year.
• Fees: None.
• Credit line: Up to $17,500.

Pros

• Available both online and in-store.
• Multiple repayment structures offer a wider range of options.
• Merchants set their rates and repayment timelines.
• Performs a soft consumer credit check.

Cons

• Missed payments may affect users’ credit scores.
• Most transactions require a credit check.
• Some transactions charge interest.

3. Afterpay

Afterpay launched in Australia in 2014, before expanding to the US, New Zealand, and the UK. Some 122,000 brands use Afterpay to reach more than 19 million customers.

The facts

• Interest: None.
• Loan term: Six weeks.
• Fees: Late or missed-payment fees can reach up to 25% of the purchase price.
• Credit line: Starts at $500.

Pros

• Encourages responsible spending for students and those who haven’t built up credit, bringing new consumers into the market.
• App includes a virtual credit card for in-store purchases at any store—even if that store isn’t an Afterpay partner.
• A reminder feature helps users stay on track with payments.
• Late payments won’t affect users’ credit scores.

Cons

• Only one payment structure.
• Each purchase must be approved by Afterpay.
• Not all purchases will be approved.
• Late fees can be as high as 25% of the purchase amount .

4. Sezzle

Founded in 2016, Sezzle has 10 million active customers and 48,000 active merchants on the platform. As a certified B Corporation (nonprofit), it offers customers the ability to reschedule payments for up to two weeks of additional time.

The facts

• Interest: None.
• Loan term: Six weeks.
• Fees: Missed payments result in account deactivation; $10 reactivation fee.
• Credit line: Varies depending on the user.

Pros

• Proven commitment to social and environmental standards. 
• Allows users to reschedule payments three times for up to two additional weeks.
• Users can build credit with the Sezzle Up option, which reports on-time payments to credit bureaus.
• Virtual credit card allows for in-store payments at select retailers.
• Excellent customer service.
• Performs a soft credit check on users.
• Three payment structures

Cons

• Fees apply for additional reschedules.

5. PayPal Pay In 4

PayPal is one of the most popular online payment processing platforms. As of August 2020, it also offers BNPL with millions of online merchants. 

The facts

• Interest: None.
• Loan term: Six weeks.
• Fees: None.
• Credit line: $1,500 per transaction.

Pros

• Familiar brand name.
• Easy to add for merchants and customers with existing PayPal accounts.
• Integrated with the existing PayPal payment setup.
• Covered by PayPal’s Purchase Protection, offering users an additional level of security on purchases.
• Performs a soft user credit check.

Cons

• Not available for in-store use.
• Limited to Australian and US buyers and sellers, excluding those in Missouri and Nevada. Note: the product is also available under a different name in Spain, Italy, UK, and France.
• Purchases must be approved by PayPal.
• Missed payments may affect users’ credit scores.

6. Klarna

Klarna is one of the most well-known BNPL companies. It was founded in 2005 by students from the Stockholm School of Economics and is now available in more countries than its competitors.

The facts

• Interest: None for the Pay Later in 30 Days and Pay in 4 plans; 0% to 19.99% for monthly financing.
• Loan term: 30 days, six weeks, and up to 36 months (monthly financing).
• Fees: $7 late fees for missed payments for Pay in 4 plan, and up to $27 for returned payments on the Pay Later in 30 Days plan.
• Credit line: $1,000 for Pay Later in 30 Days and Pay in 4 plans; $10,000 for monthly financing options.

Pros

• Available both online and in-store.
• Multiple repayment structures offer a wider range of options, allowing customers to finance medium and large purchases.
• Available in several countries in Asia, Australia, Europe, and North America.
• Performs a soft credit check on users for Pay Later in 30 Days and Pay in 4 plans.
• Mobile app users can join Vibe, a free rewards program with exclusive sales.
• Users can generate a single-use virtual gift card, which can be used in any online store—even in stores that aren't Klarna partners.
• Promotes partners through app, social media, and newsletters.

Cons

• Each purchase must be approved by Klarna.
• Monthly financing users will undergo a hard credit inquiry.
• Some fees for late payments.

7. Zip

Formerly known as Quadpay, Zip is an Australian BNPL company launched in 2013 with a simple concept: Make a purchase today and split the payment into four equal, interest-free installments. Unlike other BNPL companies, customers can use Zip for both online and in-person shopping.

The facts

• Interest: None.
• Loan term: Six weeks.
• Fees: $1 convenience fee for each payment—a total of $4 per order; late fees of up to $7.
• Credit line: Varies by user.

Pros

• Available both online and in-store.
• Virtual credit card allows for in-store purchases, even if the store does not partner with Zip.
• Notifications help users stay on track with monthly payments.
• May perform a soft credit check on users.

Cons

• The $1 per payment convenience fee means that every purchase costs an extra $4.
• Only one payment structure.

• Each purchase must be approved by Zip.

8. Splitit

Splitit was founded in 2012 and is a unique competitor in the BNPL service space. Unlike other BNPL companies, Splitit works through users’ existing credit cards, charging the full purchase amount to the card over time in small increments.

The facts

• Interest: None.
• Loan term: Varies.
• Fees: None.
• Credit line: Uses customers’ existing credit card limits.

Pros

• Available both online and in-store.
• No applications, registration, or credit checks required.
• Uses customers’ existing credit cards, allowing them to earn rewards on purchases and build credit without accruing interest.
• Users can make larger purchases without worrying about interest.
• Partnerships with Visa, Mastercard, and Stripe.
• Merchants are able to set their own qualifying purchase amounts and select between two different business plans.

Cons

• Users must have a credit card with sufficient credit to cover the cost of purchases.
• Not available with Amex cards.

Buy now, pay later FAQ

What are the biggest buy now, pay later apps?

With millions of users, Klarna and Afterpay are the two biggest BNPL companies. Both companies work with tens of thousands of retailers and are responsible for millions of transactions.

Does BNPL help your credit score?

BNPL does not help increase your credit score. With short-term repayment schedules, you typically won’t build up enough credit history for BNPL companies to report it to credit bureaus. While you may incur late fees for late payments, your credit won’t usually be negatively affected—but you won’t build credit either. Some companies, however, do offer payment plan options that can help users build their credit scores.

Do BNPL companies check your credit history?

Most buy now, pay later plans require a soft credit check which will not impact your credit score. Some BNPL services do not require a credit check at all for small purchases (but may do so for a large purchase). However, missed payments on BNPL loans can be reported to credit bureaus which may affect your credit and eligibility for this payment method in the future.

How popular is buy now, pay later?

In the past few years, apps like Affirm, Klarna and Shop Pay Installments have been gaining wide recognition, and big, established finance companies like PayPal are hopping on board. BNPL platforms and installment payment plans are becoming popular with consumers for their benefits over credit cards that charge interest. One report projects that the BNPL sector will grow from 2.9% of the global ecommerce transaction value to 5.3% by 2025.