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The Best Buy Now Pay Later Tools for Ecommerce

Check out the best Buy Now, Pay Later tools for Ecommerce here!
Derric Haynie
Jun 22
Mar 24, 2021
June 22, 2022 10:53

Sponsored by:


As an online store owner, you've probably already heard of "Buy Now, Pay Later" (BNPL) tools but never quite got around to looking into them. 

Maybe it was a fear of risk or losing money, you were too busy with other things in the business, or it might have always sounded too good to be true, right?

I’m here to tell you that this $680 Billion market is here to stay, and it’s likely to increase your conversion rate, your average order value, and really all those metrics that you love to see go up, in your business.

With online stores having to expand to their customers' needs and preferred options, many have begun to offer customer-friendly payment options as well. Not only are these solutions becoming increasingly more popular due to their seamless integration with Ecommerce platforms, but users usually don't have to pay interest or pass a credit check. 

With younger consumers looking to avoid racking up debt or paying credit card interest, many have begun to rely on flexible payment options for luxuries and everyday items. In fact, over one-third of US consumers used a Buy Now, Pay Later service last year. It's no wonder that more online stores are adopting “Buy Now, Pay Later” options to meet their customers' needs. 

Discover our list of the best "Buy Now, Pay Later" tools to learn more about how they are beneficial for any Ecommerce business.

What is “Buy Now, Pay Later”?

A Buy Now, Pay Later solution is a third-party that usually offers a flexible payment plan, without hidden fees, and sometimes no interest. Many of these solutions provide simple installment plans or flexible financing options, depending on the customer's needs.

Buy Now, Pay Later solutions are not only beneficial for users, but also for store owners who typically get paid upfront. The Buy Now, Pay Later provider assumes all credit risk, leaving the business free of any payment issues or collections.

Why Should I Utilize a Buy Now, Pay Later Tool?

Aside from the reasons mentioned above, Buy Now, Pay Later tools can help reduce abandoned cart and checkout rates. By providing flexible financial options, the barrier to purchase is lowered. Consumers are more likely to immediately indulge when a purchase can be made in installments and not paid in full upfront. The solution can also increase average order value, as many tools offer interest-free installments based on a minimum cart value.

Not only that, but many Buy Now, Pay Later tools offer businesses the opportunity to join their shopping networks which can help generate new traffic. With a customer base that is already familiar and interested in flexible payment options, businesses have the opportunity to attract high-intent shoppers. Businesses can also increase their retention rate, as shoppers want to repurchase from a store whose products they can afford.

Buy Now, Pay Later tools are also appearing to be more popular among millennials and Gen Z consumers. In fact, 26% of millennials and 11% of Gen Z shoppers used Buy Now, Pay Later for their Ecommerce purchases in the last year. If you're already targeting this demographic, we highly recommend investing in a Buy Now, Pay Later tool. 

When Should I Invest in a Buy Now, Pay Later Tool?

Although it might seem that shoppers are using Buy Now, Pay Later tools specifically for large purchases, many are using them for small everyday purchases as well, like clothing, beauty products, school supplies, and more. This means that any Direct to Consumer (DTC) business can use a Buy Now, Pay Later tool.

But obviously, if you have a low average order value, perhaps under $30, this will be less of a fit for you. Focus on increasing average order value first perhaps.

Generally, businesses with a higher average order value (typically $100 to $500) will see significant benefits with Buy Now, Pay Later tools because the barrier to purchase is naturally lowered. This means that shoppers who initially could not pay upfront can now afford the same luxuries with flexible payment options. It can be a little more complicated for larger ticket items to use Buy Now, Pay Later tools as there is a higher risk of fraud.

Keep in mind that Buy Now, Pay Later tools might not be appropriate for businesses with slim margins. If you’re only pulling 3%-5% profit on top of your Cost of Goods Sold, the extra cost of using a buy now pay later solution could put your business into the red. This is a rare case, but worth mentioning for the slim margin businesses.

One more important thing to note: Younger generations are more likely to adopt buy now pay later tools, meaning if your audience is millennial or younger, this tool will see a higher adoption rate. If they are baby boomers or older, it will still work, but it will be adopted by a smaller percentage of your audience. This can still result in an overall increase in conversion rate and revenue, but it will be a smaller boost than a similar company targeting the younger generation.

The Best Buy Now, Pay Later Tools for Ecommerce

With any Buy Now, Pay Later provider, you'll want to determine what payment options to offer your customers. While many providers offer various solutions, the most common are:

  • Installments (usually in 4 equal, interest-free payments)
  • Pay in 30 days
  • Financing (usually 6-36 months)

The best solution for your business will come down to your margins, as well as considering the purchase behavior of your target audience. 

While there are many competitors in the Buy Now, Pay Later market, we will focus on 4 direct providers that integrate seamlessly with the leading Ecommerce platforms. These tools include:


Zero Risk Buy Now Pay Later Solution

Sezzle is a "Buy Now, Pay Later" (Buy Now, Pay Later) tool that allows your customers to break up a large purchase into multiple installments at no cost to the user. Sezzle does not issue credit reports and assumes full credit risk even if a customer does not follow through on a payment.

For more information, check out our detailed review of Sezzle here


  • Customers can pay in 4 installments over 6 weeks with no interest
  • Receive payments upfront and quickly
  • Access to an engaged network to help build store awareness
  • Integration with Shopify, Magento, BigCommerce, WooCommerce, Wix, and more


Request a demo for pricing.


Personalized Buy Now Pay Later Solution

Klarna offers 4 interest-free payments with no credit impact for the customer. Klarna also pays businesses upfront and in full.

Customers have two options for financing–Pay in 30 Days and 6-36 Months Financing. The latter being most suitable for businesses selling large ticket items, such as furniture or gym equipment. 


  • On-site messaging, such as on the product pages, allowing users to learn about payment options before checking out (which can lead to fewer abandoned carts and checkouts)
  • Express button for checkout or within their mobile app for speedy payment
  • A contactless payment solution that lets customers use flexible payment options in-store
  • Pre-filled details, preferred shopping, and payment options pre-selected for returning customers
  • Integration with Shopify, WooCommerce, Magento, BigCommerce, and 3D cart
  • Access to an engaged network on their shopping app to help build store awareness


Set up is free of charge. $0.30USD/Klarna transaction and up to 5.99% variable fee.


Debt Free Buy Now Pay Later Solution

AfterPay is another Buy Now, Pay Later tool that offers customers the flexibility of paying for their order in 4 payments - 1 payment every 2 weeks. There is no interest and no additional fees, as long as the customer pays on time. 

The tool is a popular solution for many big-box retailers such as Free People, Sketchers, Urban Outfitters, Anthropologie, and others.


  • Customers can pay in 4 installments - 1 payment every 2 weeks with no interest or additional fees (as long as the customer pays on time)
  • Access to an engaged network to help build store awareness


Request a demo for pricing.


Omnichannel Buy Now Pay Later Solution

Affirm offers customers flexible payment options with no hidden fees. However, the tool does add 0-30% interest for big-ticket purchases.


  • Extend financing terms up to 36 months
  • Omnichannel integration: online store, in-store, and telesales
  • Access to an engaged network to help build store awareness
  • Affirm currently integrates with Shopify, BigCommerce, WooCommerce, Wix, Bolt, Adyen, and more


Request a demo for pricing.

Summing Up

Thousands of Ecommerce stores are already adopting flexible pricing to accommodate their customers. In fact, the Buy Now, Pay Later industry is quickly growing and will generate approximately $680 billion in transaction volume worldwide by 2025. Double of what the industry was estimated to record in 2018

While there is an apparent trend with Buy Now, Pay Later tools, it will be interesting to see whether younger generations will continue to rely on these flexible payment solutions post-pandemic instead of relying on credit cards like older generations.

If you haven't already considered this option for your business, I suggest possibly leveraging this tool today (given your finances and target audience). Not only will it help you generate income, but flexible payment options will ultimately impact your store's customer lifetime value by eliminating the barrier to purchase.

Next Steps

As with most tech decisions, we recommend vetting 2 - 4 tools in detail, demoing the 1-2 that seem to be the best fit, and locking in the tool that works best for you. After you start integrating your “Buy Now, Pay Later” tool, you may need help in a few other areas, such as:

Price Testing - Since you might be changing your margins, maybe now would be a good time to do some price testing on your products. You want to answer the question: “Can I increase the price by 5% to cover Buy Now, Pay Later fees without breaking the business?” Here’s a podcast episode on price testing that may be worth listening to about that.

Review Tools - Lowering the barrier to entry for purchasing helps to increase conversions. Why not encourage all those new customers to talk about why they love your product(s)? Here’s our roundup of The Best Review Tools for Ecommerce.  

Everything - Have you ever asked yourself “What’s the best tool for X?” With so many apps popping up in the Shopify ecosystem everyday, it can be overwhelming to know which ones will work best for your store. Check out our Ecommerce Technology Landscape to see the trusted tech providers we have curated specifically for Shopify Merchants, across all major Ecommerce categories. 

Sponsored by:


About the author

Derric Haynie was the founder and Chief Ecommerce Technologist at – Where Ecommerce stores go to research, discover, and buy the right tools to grow their store. Half of his day is spent reviewing tech tools, and the other half is talking with merchants to help them discover which solutions are right for them.