Buy now, pay later (BNPL) payment solutions are gaining popularity across e-commerce platforms. Boasting increased flexibility and greater access to products and services that might be otherwise out of budget, it is no surprise that approximately 50% of UK adults have used some form of BNPL solution in 2024.

At Allegro Logistics, we can help you find BNPL solutions for your e-commerce website. In this article, we will cover what buy now pay later solutions are, what options are available, the advantages of their use, and how to integrate BNPL with your e-commerce site.

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What is BNPL?

Buy now pay later solutions work by spreading the cost of items over a number of weeks or months. While developing initial popularity online, BNPL options are also growing throughout in-store contexts. Paying in this way grants customers greater access to products that they may not wish to purchase in one lump sum. Buy now pay later schemes are considered a line of credit, so it’s important that customers have access to full terms and conditions before signing up.

The buy now pay later process consists of numerous parts. For an e-commerce website, the process begins when an item or product is selected online. By selecting a BNPL solution at checkout, money is then borrowed from a selected lender to purchase the product. Then, a customer pays the lender the borrowed fee in installations over a given period of time.

Depending on the BNPL method selected, the loan may be subject to interest – this is especially so for plans that have a payback duration of over a year. It is important to be certain of the repayment demands set by a BNPL scheme – these should be available to read and save at the time of sign up. Based upon these requirements, a customer can then set up a direct debit or reminder to pay at the required time each month.

What Options are Available?

As with any payment method, there is a range of BNPL options available. These include Klarna, PayPal, and Clearpay/Afterpay – each of which have their own unique features and advantages.

Klarna

Currently, Klarna is one of the most popular BNPL options in the United Kingdom. Klarna offers customers three ways to buy now and pay later. These include:

Pay in Thirty Days – This gives customers thirty days to pay the full amount for a product/order.

Three Interest-Free Instalments – This option allows customers to spread their payments equally over a three-month period. In practice, this will look like one payment due on the day of purchase, one 30 days later, and the final one 60 days after that.

Finance – Finance BNPL solutions require a full credit check but allow customers to split their payments over a more flexible time frame. This solution is however subject to interest representative APR 18.9% variable.

PayPal Later

While PayPal is mainly known as a secure online payment system, it is also a BNPL lender. PayPal Pay Later offers customers two different buy now pay later services. These are ‘Pay in 3’ or monthly payments.

Pay in 3 – This solution breaks payments into three scheduled parts. This service applies to purchases between £30 and £2000.

Monthly – Alternatively, customers can break down purchases into monthly payments paid over 6 to 24 months. This repayment will be subject to PayPal’s standard interest rate.

Clearpay

A UK alternative to the Australian Afterpay, Clearpay is currently gaining popularity with UK customers. Targeted at spenders who prefer to use debit over credit, Clearpay offers flexible payments with fewer debt risks. Upon reviewing a customer’s previous use of the service, a customer is assigned a tailored spending limit. Clearpay split payments do not charge interest.

The Benefits of BNPL Solutions

Buy now pay later solutions have a range of advantages, so no wonder they’re so popular! Key advantages of these payment varieties include:

Accessible to a Range of Customers

For some customers, paying large sums of money upfront is not feasible. By providing more flexible payment solutions, businesses increase their appeal to a larger range of customers. Customers are granted more options when it comes to their shopping experience – their ability to ‘check out’ is not entirely limited by their current available funds. This flexibility could open the doors for your business to access a larger customer base that includes customers otherwise excluded by traditional payment methods.

Encourages Customers to Buy Higher Value Goods

When customers have the option to spread their payments over time, they may be more inclined to purchase a higher-value item. Naturally, this boasts advantages for a business in that it directly impacts overall profit.

Reduce Cart Abandonment

When shopping online, an unexpectedly high cart total can pull the breaks on a purchase. If a customer adds a number of items to cart and cannot settle on one to part with, the total payment required could deter them from making a purchase at all. BNPL options give shoppers choices which reduce the likelihood of a cart being abandoned altogether. For example, a pay-in-3 plan may make a checkout total feel more manageable in the eyes of the customer – increasing the likelihood of a conversion for that customer engagement.

One important factor to consider if your e-commerce business is looking into BNPL solutions is implementation. If your business already uses point-of-sale systems, bringing BNPL processing in-house can be costly and complicated. Luckily, providers such as Klarna, PayPal and Clearpay can manage processing for an e-commerce business. Often, e-commerce sites will utilise extensions (like plug-ins) to integrate alternative payment options into their checkout options. Additional widgets directing customers to information about BNPL solutions can also be added.

The best way to implement BNPL solutions into your e-commerce business is to work with trusted logistics experts like Allegro. We can help you to find the right solution for your operations and customers, helping you keep a steady income flow while ensuring a clear-cut order process with streamlined supply-chain management.

Buy now pay later offers flexibility for your customers, allowing them to leverage greater buying power. In turn, this benefits your business by increasing profits through reductions in cart abandonment and buyer’s remorse.

At Allegro Logistics, we offer integrated e-commerce fulfilment solutions from our home in Bristol. Our team has extensive experience in the logistics field, with services covering everything from e-commerce fulfilment to storage and returns. Get started with our solution today by requesting a quote!

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