Here’s our rundown of the top 5 BNPL apps and services, including the key figures you should know before you use one. GoCardless can also help you collect invoice payments on time and automate recurring payments.The 5 best ‘buy-now, pay-later’ platforms of 2023 Offering instalment packages to your customers has been shown to increase sales, and it's easy to do this with ACH Debit via GoCardless. GoCardless helps you affordably automate payment collection, ensuring payments are always paid on time. It’s always a good idea to compare BNPL to other financing options, including personal loans and rewards credit cards, to ensure you’re getting the most for your money. Any late or missing payments could cause a hit to your credit score. While some companies will ask you to make four equal instalments, others will spread them out into longer repayment periods. Just be sure that you understand the terms and conditions clearly. Some BNPL options offer an easy way to finance a larger purchase without interest fees, which seems like a good deal on paper. ![]() Does Buy Now Pay Later offer a good deal? With additional sites like Quadpay and PayPal also available, you might even see more than one BNPL option to choose from at checkout. ![]() It typically breaks payments into four equal instalments with no interest fees. Klarna is a third option, partnered with stores including Macy’s and Sephora. This means that while some Affirm loans come with zero interest, others will have a 30% APR. Its payments have zero interest rates attached.Īffirm partners with brands like Walmart, but one thing to note is interest rates are set by the individual retailer. One of the largest sites in the US is Afterpay, which partners with big names like Gap and Old Navy. Most major retailers now partner with a BNPL provider to offer their customers this option. In a survey carried out by The Strawhecker Group (TSG), BNPL customers noted that they tend to spend more through BNPL than other payment methods. However, it's important to remember that BNPL encourages you to spend money. To minimize any downsides, look for plans with no interest rates that you know you’ll be able to pay off on time. Missed or late payments will impact your credit score Refunds can be delayed due to extra processing times No cash-back bonuses, rewards points, or other perks On the other hand, there are a few potential downsides as well: There are advantages and disadvantages to Buy Now Pay Later arrangements.Ī soft credit check doesn’t impact your score Pros and cons of Buy Now Pay Later for consumers Read more about the business benefits of adding bank payment methods like ACH Debit to your payment mix. GoCardless is a global leader in bank payments such as ACH Debit that offer businesses more reliable, secure and affordable payment collection. BNPL and bank debitīNPL provider Klarna chose GoCardless to offer our bank payment service to their 21 million US customers! However, credit card payments are more flexible in that you only need to pay the minimum balance each month. This sets BNPL apart from credit card payments, which come with accrued interest. Most short-term plans are broken up into four equal instalments without any added surcharge or interest fees. One variation is when you see the phrase “buy now, pay later, no money down.” This means that you don’t need to pay anything to check out and receive your product. You pay the remaining cost over time in a series of instalmentsīNPL plans typically accept multiple payment options, including card payments and online bank transfers. You make an initial instalment or down payment at checkout You provide some basic details for a soft credit check You make a purchase and choose the BNPL option at checkout How does Buy Now Pay Later work when you pay in instalments? ![]() While the general principle is the same across all BNPL plans, there is some variation when it comes down to the terms and conditions. Like other loans, some BNPL plans include interest payments and late fees, although many plans don’t have any added charge. These payments typically spread the cost over multiple small installments – BNPL arrangements are often called point of sale installment loans for this reason.Ĭonsumers can pick and choose from a variety of Buy Now Pay Later options, including Klarna, Affirm, and PayPal. What is Buy Now Pay Later financing?īuy Now Pay Later, or BNPL for short, is a financing arrangement that allows consumers to make a purchase and pay for it later. ![]() But what does “Buy Now Pay Later” mean exactly, and what can you purchase with it? We’ll give an overview of how this form of financing works, along with its pros and cons, below. You may have seen or heard the phrase in advertisements, particularly online: buy now, pay later, no money down.
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