BNPL - Buy Now Pay Later

What is BNPL?

Buy Now Pay Later allows customers to receive their items immediately and pay over time. Typically, the amount is divided into 3–4 interest-free installments, or the customer is given a deferred payment period (e.g., 14 or 30 days). The BNPL provider pays you, the online store owner, immediately and assumes the credit risk.

How BNPL Works

1. The customer selects BNPL as the payment method at checkout.
2. The BNPL provider performs a quick credit check (typically within seconds).
3. The customer is approved and completes the purchase.
4. You receive payment from the BNPL provider (minus a fee) immediately.
5. The customer pays the BNPL provider in installments or by a deferred due date.

Popular BNPL providers in Denmark

• Klarna: The best-known BNPL provider, offering “Pay Later” (deferred payment) and “Installments” (payments in installments). High brand recognition among Danish consumers.
• Anyday: A Danish BNPL solution focused on interest-free installment payments in 4 installments. Lower fees than many competitors and a strong presence in Danish e-commerce.
• ViaBill: A Danish provider offering “Try First, Pay Later” and installment plans of up to 24 months.
• Resurs Bank: A Nordic provider offering various financing options, including invoice financing and installment payments.

Benefits for online stores

• Higher conversion rates: Removes the payment barrier—especially for more expensive products. Customers who would otherwise abandon their carts complete their purchases.
• Higher order value: Customers typically spend more when they can pay in installments. Studies show an average 20–30% increase in order value.
• No credit risk: The BNPL provider assumes the credit risk. You receive the money immediately, regardless of whether the customer pays.
• Competitive advantage: Customers prefer stores that offer flexible payment options and often choose the store that offers their preferred payment method.
• New customer segments: You reach customers who might not have made a purchase without the option to pay in installments.

Costs for online store owners

BNPL providers typically charge a transaction fee of 2–6% of the order amount. The fee varies depending on:

• Provider: Anyday generally has lower fees than Klarna.
• Volume: Higher sales volume can lead to better terms.
• BNPL type: Deferred payment is typically cheaper than paying in multiple installments.

For many stores, the fee is offset by increased conversion rates and higher order values.

The Customer’s Perspective

For the customer, BNPL is attractive because:

• They can try the product before paying the full amount.
• Installment payments are often interest-free (if paid on time).
• It provides flexibility in personal finances.

However, it’s important to note that BNPL can lead to overspending among some consumers, and there is growing regulatory scrutiny in this area.

BNPL in Shoporama

Shoporama supports BNPL through integrations with common payment gateways. You can offer BNPL as a payment option at checkout by setting it up through your payment gateway—such as QuickPay, OnPay, or Stripe, all of which support multiple BNPL providers. Clearly display the BNPL option on product pages (e.g., “Pay from X kr/month”) to increase conversion rates even before checkout.