Merchants must continually find ways to attract customers by offering new and different payment methods. One method gaining in popularity is Buy Now Pay Later. Similar to the “lay away” model of old, BNPL offers customers flexibility in payments without added interest fees. This model allows customers to purchase online and then break down payments into installments. For millennials concerned about economic pressures and taking on more debt, this option has been welcomed. BNPL helps customers manage payments, while still getting the products and services they desire.
For merchants, BNPL still provides all revenue up front, with the added knowledge that the customer is good for the money. BNPL accounts are linked to the customer debit or credit card with services confirming eligibility. Some of the biggest players in this space are Klarna, Affirm and Afterpay. As a recurring merchant, you will start to see processors offering these services as part of the payments toolkit.